Tourist Taxes: Review and Enforcement

Abstract

[eng] Since the birth of tourism, tax burden has been inherently associated with tourism related activities. The exponential growth of this industry has been accompanied by a large number of different tourist taxes. Many tourism activities which involve accommodation, transport or complementary services are riddled with regional- and state-wide burdens. This paper tries to give an overview of indirect taxes as well as the most common direct tourism taxes, the objectives of this type of taxation, which in many cases is merely another source of funding, and finally the economic and social consequences of introducing tourism taxes. Through the two-way process of tourism performance in the economy, the paper searches to demonstrate the importance of tourism taxes and the role it plays on the tourist industry. A particular emphasis has been placed on the case of the Balearic Islands where tourist taxes are to be introduced for the second time. In light of the above, earmarking specific tourist tax as well as the proper use of communication channels will play an increasingly important role in the future.