|Is this "tourism" therefore in wrong IVA bracket?|
The President has sent a letter to the Ministers of Economy, Finance and Tourism, the Secretary of State for Tourism and also to deputies and senators of the ruling PP party to "carry out a reflection and reconsider the impact" that the increase of VAT will have for certain components of tourism.
Currently "tourism products and services" attract a reduced rate of VAT (8% which will rise to 10% on 1st September) and accommodation and transport fall into this category. But the hotel association want products such as theme parks, nightclubs and golf courses reclassified as they are "directly related to the flow of foreign and Spanish tourists" and so "are necessary to keep Spain in its privileged position in world tourism"
|Hotel are in reduced IVA band...|
The HOSBEC president stressed that these products have "unexpectedly" been placed in the 21% bracket which will lead to a loss of competitiveness in their respective business segments". Currently these 3 categories of products are in the reduced 8% category as they are classed as tourist related but by placing them in the 21% bracket instead it means a 13% hike in prices!
In his letter Mayor wrote "We are aware of the delicate social and economic situation we are experiencing and are partners in the implementation of measures to maintain tourism, but we need the Government to be aware what this 13% increase will have and need to protect and support tourism. The hotel association has requested specifically a review of VAT rates affecting these companies so that they are linked to tourism marketing and to maintain their position in the reduced VAT as they have done so far"
|Will golfing breaks be affected?|
Will the VAT hikes make a difference to tourism - only time will tell. Golfing is fairly expensive anyway so will a 13% increase affect business. Spain is a very popular golfing destination - the Villaitana Complex in Benidorm attracts many weekend golfers from the UK, especially as its such a short flight.
The proposed increases are still being clarified. For instance, spectacles and contact lenses are now only going up to the subsidized 10% band and not the 21% as was initially announced. There may yet be other changes - 1st September is a long way away... especially in politics. The Government may not have any feet left to shoot themselves with otherwise!