To fully capitalise on the tourism boom boosting the Italian economy, the government proposes an extension of the tourist tax to all municipalities. Hoteliers are not amused by the government’s proposal.
Although still a proposal, the extended tourist tax has been drafted in a decree, which is enough to provoke strong opposition from the hotel industry. Hoteliers consider this a betrayal by the government, particularly as the increased tax revenue could be redirected to waste management rather than solely supporting the tourism sector.
The draft regulation revises the boundaries of the levy paid by tourists.
Tourist Tax Overview
In Italy, the tourist tax is a local levy charged to people staying in accommodation in tourist areas or art cities. Application methods vary, with fixed and variable rates, associated with hotel types, categories, price brackets, location, and season.
Exemptions differ by municipality, based on residency, age groups, activities, length of stay, disability, accommodation ownership, seasonality, and other factors.
Airbnb to collect local tourist taxes
Price Hikes Anticipated
The revised tourist tax could be extended to all 7,904 Italian municipalities, compared to the current application limited to provincial capitals, unions of municipalities, and tourist destinations.
The amounts would also be adjusted: up to €5 for stays under €100, up to €10 for rooms between €100 and €400, up to €15 for accommodations between €400 and €750. A maximum is proposed of €25 per day for luxury hotels (over €750 per night).
Revenue Allocation Concerns
Additionally, revenue would be allocated not only to tourism-related initiatives but also to waste collection and disposal, causing concern among trade associations.
Federalberghi, representing the hotel industry, opposes further tax increases, especially after a recent 40% hike in anticipation of the Jubilee, raising the ceiling from €5 to €7 per night per person and allowing its use for waste management costs, thereby distorting its original purpose. Hoteliers argue the new changes would effectively double the tax burden, likening it to doubling the 10% VAT overnight.
Furthermore, Federalberghi ask for the following to be considered:
- to impose correct budgetary discipline on local authorities, rather than providing them with tools to “make the situation worse”.
- that a fund be established by national law to permanently support the redevelopment of tourist accommodation businesses, and that automatic financing is guaranteed drawing on a part of the revenue from the tourist tax.
- to finance the functions carried out by local authorities in the tourism field with methods other than the tourist tax.
Confindustria Alberghi concerned
Confindustria Alberghi operators are also alarmed by rumours of the new tourist tax regulation possibly being approved in the next Council of Ministers. Maria Carmela Colaiacovo, President of Confindustria Alberghi, expressed surprise at the sudden move to approve a text that seems to lack some key elements of the previously discussed reform.
“It is surprising that after months of fruitful dialogue and discussion, we are proceeding, instead, suddenly to approve a text where some of the cornerstones on which the reform under discussion was based seem to be missing.”
She also highlighted the overall tax increase, which would affect even less touristy destinations, contradicting recent efforts to distribute tourism flows better across inland areas.
“The sector is making an important contribution to the country’s economy, particularly with the growth of international travellers, after the difficult years of Covid. But foreign competition is strong and fierce, we need careful policies that do not compromise the competitiveness of our businesses and our destinations. We cannot be a mere ATM for municipalities”, Colaiacovo said in her statement.
Ministry of Tourism’s Response
In response to media reports, the Ministry of Tourism noted discussions with trade associations and other stakeholders are ongoing regarding the proposed amendments to the tourist tax regulation.
“The dialogue will continue in September,” stated the ministry.
