It is meant to be one of Portugal’s flagship attractions, but instead the golf sector is floundering in a bunker of the government’s making.
In a hard-hitting interview with Diário Económico, golfing industry chief Diogo Gaspar Ferreira reveals that out of the country’s 80 golf courses, 65 are now losing money “thanks to the smart decision to raise VAT” by a whopping 17%.
The increase – brought in with the initial raft of austerity measures in 2011 – has seen the once buoyant sector cut off at the knees.
It is now one that is unsustainable, he warned. And while the government clearly has no plan to return VAT to pre-2011 levels, golf locations like Spain and Turkey continue to rake in trade, with the latter actually charging no VAT when it comes to the sport.
The president of CNIG (the golf industry’s national council), Ferreira adds that the crisis has led to as many as 25% of courses effectively bankrupt and “in the hands of banks or funds”.
It is particularly frustrating, he said, as the industry is Portugal’s leader when it comes to attracting overseas clients.
And while hotels – which reap the benefits of golfers choosing Portugal – pay only 6% VAT, the ‘golden chicken’ that helps fill them in low seasons remains saddled with having to fork out 23%.
Will things change? Ferreira doesn’t think so. It’s political, he explained. The tax is considered to be one that “hurts the rich” and, therefore, much as it takes collateral damage with it, it is probably here to stay.
