VAT rise in golf ‘disastrous’ for Algarve tourism

Golf associations in Portugal continue to fight against a possible VAT increase in the sector next year, a move they say “will take the Algarve back to the 80s”.

The National Council for the Golf Industry (CNIG) has said that if VAT increases from the current 6% rate to 23% as the government is proposing in its 2012 State Budget, in three or four years time the Algarve will be as it was in the 80s, “a summer-only destination”.

The CNIG and the Portuguese Tourism Confederation (CTP) have now requested an urgent meeting with the main parliamentary leaders to discuss the situation.

Both entities hope VAT in the golf sector will remain at the minimum rate for fear of jeopardising the future of one of Portugal’s most competitive industries, leading to disastrous results for Algarve tourism.

“Increasing VAT to the top rate will result in losses of 15% and 20% of the current market share to its direct competitors, Spain and Turkey,” said the CNIG, which added that many four and five star hotels that remain open throughout the autumn and winter due to the golf season may end up closing as well as many low cost routes serving the Algarve relocating to other destinations.

With the proposal to increase VAT on golf, the CNIG warns that “we should prepare to see the region going back to being solely a summer destination”.

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