In 2023, revenue from the Balearics tourist tax will be allocated to purposes stipulated in the sustainable tourism tax law of 2016. The pandemic led to revenue from the tax being diverted, but an estimated 140 million euros to be raised in 2022 will go to the original purposes in next year's budget.
The purposes set out in law are - projects for the protection of the natural environment; projects to address tourism seasonality; restoration of historical and cultural heritage; research and innovation for economic diversification, climate change and tourism; improvements to training and the quality of employment; social housing with sustainable energy criteria.
The commission which approves spending of tourist tax funds will also be reactivated. This comprises government ministries, the island councils, Palma town hall, the Felib federation of town halls, the two main unions (CCOO and UGT), the two main business organisations (CAEB and Pimem), environmentalist groups (GOB and four others), the university and the inter-island agrarian council.
The suspension of this commission and the use of revenue for general purposes were heavily criticised by the hoteliers (who are represented on the commission by CAEB) and by environmentalists.
The hoteliers sent a harsh letter to parliament saying that tourists were unaware that the tax was being used to cover the effects of the pandemic, "deviating from the objectives for which it was created". They attacked the government's "poor transparency", given that the commission is supposed to decide on projects. There was particular outcry last year when it emerged that the tourist tax was used to sponsor the Los 40 Music Awards in Palma in November. The government defended this on the grounds that it conformed with projects for tourism seasonality and that it had a promotional and economic benefit.
The fact is that various entities have been dissatisfied with aspects of revenue spending. The hoteliers, fundamentally opposed to the tax in any event, have attacked the use of revenue for social housing, as have environmentalists. They have argued that the annual budget should cover this anyway.
GOB have always argued that the tax should be for environmental purposes and nothing else, while Felib have maintained that requests for funding from town halls are overlooked. There has been widespread criticism of the commission in that it is loaded in favour of the government and island councils.