Photo: PAULO MARIA

Algarve tourist tax fund “could be used to promote events like F1”

10% of tourist tax revenue to go into promotional fund

The Algarve Municipalities Association (AMAL) continues to discuss the introduction of a regional tourist tax in 2023, which could be followed by the creation of a promotional fund which would use 10% of the tax’s revenue to “attract new air links” or promote “big international events like F1.”

So said AMAL boss António Pina last week in an interview with Lusa news agency, adding that the ideas are still being discussed by the region’s boroughs.

The idea of a regional tourist tax was discussed in 2019, but the idea was scrapped due to the Covid-19 pandemic until it re-emerged in 2022.

The idea is to extend the measure to any other borough that agrees with it, charging tourists €2 a day up to a maximum of seven days, with children under the age of 12 being exempt. However, this may still change.

According to Pina, the creation of the promotional fund is “one of the measures that we are analysing along with others which were pitched, such as the setting of maximum and minimum values which can be charged depending on the low and high seasons, and exemptions for children, families and long stays.”

As he has stressed repeatedly, the decision to charge the tax and contribute to the fund will be up to each municipality.

“The measures will have to be submitted, analysed and approved by each municipal assembly,” Pina said, adding that he will defend the tax and the fund as mayor of Olhão.

Pina added that AMAL wants the tourist tax to be based on three principles: an equal value for the entire region, its creation being carried out along with the tourism sector, and the importance of being “solidary” and creating a regional fund to “sell the Algarve product”.

It has been suggested that the visitor levy could bring in around €30 million a year.

At the moment, only Faro and Vila Real de Santo António charge visitors a tourist tax in the Algarve.

In October, Portimão mayor Isilda Gomes publicly supported the idea, saying that the municipality plans to go ahead with the tourist tax.

She also said she is “fully in agreement” with the €2 charge per person and per overnight stay and added that “it is a fallacy to say that by charging this fee, fewer tourists will come”.

Hoteliers have been less enthusiastic and have stressed that “companies are already being forced to reflect the effects of the energy costs, inflation and the price of raw materials on the prices they charge.”

According to the Algarve Hoteliers Association (AHETA), the introduction of a ‘tourist tax’ at this time would have a “negative impact”.

João Fernandes, president of the Algarve Tourism Board (RTA) and Algarve Tourism Association (ATA) has also questioned whether now is the right time to introduce the additional charge.

“It does not seem like the best time to be returning to this topic, having just emerged from a two-year crisis of losses and with a new year approaching filled with uncertainties and alarming signs of inflation and economic stagnation, with an impact on rising production costs for companies and shrinking purchasing power of Portuguese and foreign consumers (which is particularly serious in our main markets, the UK and Germany),” Fernandes told the Resident in October.

By Michael Bruxo

michael.bruxo@portugalresident.com