Great news for the Algarve as Lisbon’s 2015 budget contains plans for a ‘per night’ tourist tax to start in 2016, and an airport tax to start next year.
Lisbon’s City Hall is planning to charge a tax for each overnight stay in the capital, up to seven nights, in a move to increase council income at the expense of hoteliers, and ultimately the tourists themselves.
The powerful Lisbon council also is to change a fee per passenger landing at the airport in a move that has troubled tourist and accommodation associations.
In a statement, the Hospitality Association of Portugal "manifestly sets itself squarely against any tax increase on hospitality, regardless of the nature and name that will take, as well as any fees that penalise tourism."
The AHP states that "as a result of the presentation of the ‘Strategic Plan for Tourism in Lisbon Region 2015-2019’ the Lisbon Municipality has been developing contacts with us to measure the willingness to participate in decisions about tourism development of the city." However, the AHP has not been asked about the tourist tax and is dead against it.
Nuno Ferrari of Olissippo Hotels in Lisbon said that this tax move “would be bad for the hotels, for all agents involved in the tourist business and obviously for the end customer because this cost will be paid by him."
Lisbon council wants €7 million extra from tourists starting in 2016 for overnight stays and from next year at the airport.
Lisbon mayor António Costa claimed that it is a "temporary tax" subject to evaluation in 2019, when the Strategic Tourism Plan ends, forgetting perhaps that in 2013 he assured the city that he would never enforce tourist taxes in the capital.
Experts on Constitutional Law and Administrative Law say that the tax may be unconstitutional and that Lisbon has no legal powers to apply the rates to tourists.
Jorge Gouveia, a professor of constitutional and administrative law, believes that "the municipality can only charge fees for services that are rendered by itself."
In July this year, the Association of Hotels and Resorts in the Algarve commented on proposals to introduce a tourist tax along the lines of the Lisbon one. "At a time when tourism is showing some signs of recovery, after many years of stagnation and decline, the announcement of more taxes on the sector is not only counterproductive, but is a threat to its competitiveness."
AHETA added that "in the case of the Algarve, the effects of an increase in unemployment would be enormous, translated into exponential growth of units closed during the low season."
The Portuguese Tourism Confederation also warned that the creation of taxes such as a tourist occupancy tax or an air passenger tax is a serious threat to the competitiveness of tourism.
The Confederation said that these two proposals are contained in the Green Tax Reform presented in draft by the Government in July and that they would affect an industry that is "essential to our economic recovery."
The Algarve’s councils bring up this topic from time to time but as they have been unable to agree as one to introduce a tourist tax, it has never happened.
Councils fear that if they have a per diem tourist tax and the neighbouring council does not, that its hotels will lose business.
The hotel sector claims that its members pay enough in rates and other local taxes to prop up often financially incompetent councils and that another one is 'a tax too far.'
Price sensitivity in the Algarve package deal holiday market is high and the addition of a landing fee and a per night fee may have an unduly detrimental impact on holiday bookings. The fact that Lisbon is to charge such taxes will give the Algarve a marketing advantage over the capital.
The president of the Intermunicipal Community of the Algarve (AMAL) said today that, for now, the Algarve’s councils are not going to implement a similar scheme to that in Lisbon.
"During formal meetings in the past year no Algarve mayor has expressed any intention of implementing a tourist tax,” said Jorge Botelho.
Comments