Industry, Tourism & Trade Minister Reyes Maroto’s surprise announcement that the Government is "open to lowering the tourist VAT below 10%" has been heavily criticised by the entire Spanish and Balearic Tourism Sector, as well as CAEB and PIMEM.
"We are open to continue taking action because the Tourism Sector needs the support of the Government and the Tourism Sector will get Spain out of this crisis when the pandemic passes," said Maroto.
“It sounds good, but it needs to be analysed with prudence. We see it as the Central Government's untimely sensitivity towards Tourism, it should have been done years ago to help the Balearic Islands compete with Turkey, Egypt and Greece," said PIMEM President Jordi Mora. "The coronavirus crisis has invaded everything in a negative way and reducing the tax now won’t reactivate holiday demand because tourists in emitting markets have no intention of travelling.”
”It is time to lower VAT in all Sectors of the tourist value chain” added CAEB President, Carmen Planas, who insists that CAEB has "repeatedly highlighted the need to lower VAT in all Sectors hardest hit by the economic crisis caused by the pandemic, in the same way that we have opposed the Government's proposal for private education and health exemption from VAT."
She also stressed that it is urgent to support companies and workers with reactivation plans that stimulate demand, "instead of considering measures with a clear desire to collect money, that lead to an increase in unemployment.”
"Anything that helps to reactivate tourist activity is welcome and the Government must act accordingly,” said the Hotel Associations of Mallorca, Menorca and Eivissa-Formentera and the Association of Hotel Chains.
VAT
Tourist Business Associations have been demanding a super-reduced VAT rate for tourism for years and hope that with the fall in tourist activity and loss of jobs in all holiday destinations, the Government will now address their demands.