The demand of tourist companies to reduce VAT falls on deaf ears

Reyes Maroto doubts that the measure will have an effect on demand

The tourism sector is calling for a reduction in tourist VAT, which has been set at 10% since 2012, to offset the effects of the pandemic, which has hit the sector like no other. For this reason, the business organizations are demanding that the Executive of Pedro Sánchez reduce the tax by between 4% and 7%, a measure that has been resorted to by countries such as the United Kingdom, Germany, Greece, the Czech Republic, Turkey, Norway, Ireland, Cyprus or Bulgaria.

Although the demand has not received a response, the Secretary of State for Tourism, Fernando Valdés, has assured that it is being considered within the package of specific measures in which the government works. He also pointed out in an interview with El Economista that although it is possible that the measure will not be approved, “it is looking at how to reduce the tax, financing or labor burdens of these companies”.

While the Minister of Industry, Trade and Tourism, Reyes Maroto, asserts that the reduction of VAT, far from encouraging sales, only represents an improvement in the companies’ profit and loss accounts, the Tourism Bureau advocates, in addition to the reduction of VAT, for a reduction of the Corporation Tax and for the extension of the payment periods and the filing of declarations. The companies demand for tourist establishments, also, a reduction of taxes and municipal taxes proportional to the time of closure required by the pandemic.


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