Hoteliers: Higher VAT on Accommodation Will Have Ruinous Impacts on Sector

Bratislava, September 23 (TASR) - Employers engaged in the tourism sector held a news conference on Monday to express their disagreement with the introduction of 23-percent value-added tax (VAT) on accommodation services. According to them, the proposal will have ruinous impacts on them and decrease their annual revenues by some €270 million. Therefore, they are demanding that the Finance Ministry should revise the proposal. "The whole sector is currently sensitive to prices in the context of global competition, and so an unreasonable increase in VAT will reduce demand from tourists, the occupancy of accommodation facilities and overall consumption in tourist destinations, [it will] freeze investments in development and quality and make the entire sector less competitive. We view this as inadmissible, and we simply cannot agree with such a step in any case," said Association of Slovak Hotels and Restaurants (AHRS) general manager Martin Novotny. The employers also pointed out that the Finance Ministry is proposing increasing VAT on accommodation even though 20 of the 27 EU-member states have it at a level of 10 percent or lower. "It is striking that this weighty proposal by the Finance Ministry wasn't preceded by any professional discussion on the possible impacts on the entire sector," added Slovak Travel Agencies Association (SACKA) vice-president Roman Berkes. In addition to discouraging tourists, the measure might result in a rapid growth in unemployment, warned the employers. "The proposed increase to 23 percent will cause an annual outflow of 1.3 million visitors, which might threaten 15,000 jobs in the sector and related industries," stated Novotny. Opposition MP Marian Viskupic (Freedom and Solidarity/SaS) agreed with the hoteliers' statements at a news conference on Monday. "This measure means the risk of a complete loss of competitiveness for hoteliers. This isn't consolidation, but elimination. There will be no increase in the amount of tax collected, only ruined tourism and a grey economy," he added. ko/df