AHRESP considers Azores tourism tax a ‘strategic mistake’

AHRESP considers Azores tourism tax a ‘strategic mistake’

AHRESP/Azores on Thursday considered the creation of a regional tourism tax a “strategic mistake”, warning of the “extremely fragile” financial position of companies in the sector due to the consequences of COVID-19 and the war in Ukraine.

In a statement sent to the Lusa Agency, the regional delegation of Associação da Hotelaria, Restauração e similar to Portugal (AHRESP) expressed its “disapproval” of the creation of that regional tax, which was generally approved Wednesday in the Azores Parliament, in a motion by the Azores Parliament. .

AHRESP criticizes the initiative’s “inadequacy” in the “status quo”, considering that the application of the tourism tax in the Azores is a “strategic mistake”, which means “more direct and indirect costs for tourists and businesses”.

Companies are now very fragile financially, as a result of two years of consecutive losses due to Covid-19. When the prospects for recovery began, we are facing price hikes and inflation, exacerbated by the recent conflict between Russia and Ukraine,” he adds.

For the association, the conflict in Ukraine “threatens the already weak position” of companies and the “business viability and jobs” of the tourism sector.

AHRESP recalls a survey conducted by the association in January 2022 that “revealed that about 40% of respondents in tourist accommodations would not support or had doubts about whether they could subsidize their fees”.

In this survey, 45.7% of entrepreneurs in those places admitted that they would have gone into bankruptcy if they could not “face their burdens”.

“A measure like the one now generally approved and which never ceases to surprise us, is, therefore, absolutely not recommended, and has the sure effect of deteriorating the economic situation of companies, with all the inconveniences this entails for the regional economy. And even for the Azores as a tourist destination,” warns AHRESP.

The regional delegation, led by Claudia Chavez, argues that “creating burdens on tourists” will have “negative effects on business”, as it will lead to “less demand” and more “bureaucratic burdens”.

AHRESP also notes that the fee is “constitutional questionable”, as it does not have a “sylalagmatic character” (binary), and should be considered a “tax and not a fee”.

“In this case, we are facing a membership unconstitutionality, since the establishment of taxes is a legislative competence reserved for the Assembly of the Republic,” the assembly notes.

The Azores Local Accommodation Association (ALA) also said today it was “confused and outraged” by the approval of the regional tourism tax, claiming it was “unfounded” and would “encourage an exit from the market” for owners.

On Wednesday, the Azores parliament approved, in general, a proposal from the PAN, to introduce a regional tourist tax, with the regional secretary for tourism, Berta Cabral, arguing that “this is not an opportunity”.