The Blog: Tourist tax - misunderstanding and rejection

The reasons for Cladera’s insistence were twofold. There were to be five purposes for the tax, only one of which was definably “eco” in that it dealt with the environment. Others included heritage preservation and training in the tourism sector. A sixth purpose, which no one had seemingly been aware of initially, was to emerge when Bel Busquets of Més became tourism minister - social housing.

The other reason was the memory of the previous tax. Introduced in May 2002 and scrapped eighteen months later following a change of government, this was an ecotax. Its purpose was squarely environmental and it had been championed by PSOE’s tourism minister, Celesti Alomar.

The failure of the old tax and the stigma attached to this failure were why PSOE were never keen on a new tax. Francina Armengol had in fact told hoteliers that there wouldn’t be one. But the politics of the pact for government with Més were to ensure that there was a tax. Més (Biel Barceló) demanded control of the tourism ministry. They also demanded a tax. When it came to pass, a PSOE finance minister, Cladera, wanted everyone to know that this wasn’t a reinvention of the ecotax, something from which the latest PSOE hierarchy had wished to disassociate themselves.

That PSOE have come to more enthusiastically embrace the tax owes much to the public support that the tax enjoys and which there hadn’t been in 2002. In addition, there has been a tax “creep”, one that some - including myself - had always suspected would be the case. It has taken on the appearance of a general purpose tax, with government “stellar” projects to benefit.

The extension of the Metro to the ParcBit technology park has been a case in point. This was, however, abandoned last year because of Covid. Tourist tax revenue was indeed needed for general purposes.

Meanwhile, the Balearic government now finds itself anticipating pot loads of European recovery funds. Transport projects, such as the tram to the airport, are due to be funded this way. Tourist tax revenue, far lower than had been forecast because of Covid, has become incidental, while the tax itself - part of the furniture - has required a shorthand. Ecotax is less of a mouthful than sustainable tourism tax. Common usage has taken over, and hence misunderstanding of the tax has grown.

Government explanations as to how the tax is meant to be spent have never been satisfactory, especially the explanations for those who pay the tax. As a consequence, one gets comments such as “I don’t mind paying the tax if it helps the environment”. Fine, but the environment is only one of a set of purposes.

An erroneous tag, ecotax, for what has become an erroneous tax in that it seems that it can be bent to meet whatever purpose is deemed necessary. While I was never a fan of a tax being reintroduced, I had argued the case for one if it were justifiable as a moral tax - payment for water in particular. As it happened, there was an adjustment to 2017’s revenue in response to drought - getting on for half of this went on water projects.

Since then, we have had the dubious allocation to social housing. This was not at all dubious in terms of government spending, but it was when it came to who was supplying the funding. In Valencia, the Compromis coalition (very much like Més) is PSOE’s government partner, and Compromis have demanded a tourist tax to be introduced in 2022 and for it be used for social housing for the young. A worthy project for spending, but why should tourists foot the bill?

Ximo Puig, the PSOE president of Valencia, has to be diplomatic with his partner but he has as good as rejected the idea. He has never been in favour and nor has the secretary for tourism, Francesc Colomer, who reports to him directly. Compromis argue that tourists won’t stop coming because of a couple of euros a night, but out of respect to these tourists, they are entitled to know that a tax is relevant. And I’m sorry, but social housing isn’t. Nor is a tax if it simply ends up in the general coffers.

The Balearic government wants responsible tourists who are respectful of the environment, the culture and the way of life and who buy in to all this. But the government has its own responsibility for reciprocating respect. Tourists need to truly understand a tax, but as it is - partly because of the nickname - they do not. Ecotax? What ecotax?