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Taxing Tourism in Spain: Results and Recommendations

Author

Listed:
  • Xavier Labandeira

    (University of Vigo)

  • Alberto Gago

    (University of Vigo)

  • Fidel Picos

    (University of Vigo)

  • Miguel Rodríguez

    (University of Vigo)

Abstract

This paper analyses the foundations, possible applications and the effects of tourism taxation in Spain. The article begins with an analysis of the economic and environmental reasons for taxing tourism, which would seem to call for taxes based on the principle of benefit, for either revenue or corrective purposes. Subsequently, we describe the praxis of tourism taxation in Spain, with special mention being given to the now repealed Balearic ecotasa. Finally, the effects of two fiscal modifications with revenue or corrective objectives are studied through the use of an applied general equilibrium model developed for the Spanish economy. We thus see that a 10% tax on lodging brings in significant public receipts, increases social welfare and has no effect on the environment. On the other hand, an increase of VAT rates on tourism-related sectors could have the same effects on tourist expenditure but at the costs of greater impact for Spain’s economy.

Suggested Citation

  • Xavier Labandeira & Alberto Gago & Fidel Picos & Miguel Rodríguez, 2006. "Taxing Tourism in Spain: Results and Recommendations," Working Papers 2006.40, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2006.40
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    References listed on IDEAS

    as
    1. Harry R. Clarke & Yew-Kwang Ng, 1993. "Tourism, economic welfare and efficient pricing," Monash Economics Working Papers archive-18, Monash University, Department of Economics.
    2. Alberto Gago & Xavier Labandeira & Fidel Picos & Miguel Rodríguez, 2006. "Environmental Taxes in Spain: A Missed Opportunity," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0609, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. José M. Labeaga & Miguel Rodríguez & Xavier Labandeira, 2006. "A Macro and Microeconomic Integrated Approach to Assessing the Effects of Public Policies," Working Papers 2006-02, FEDEA.
    4. McAleer, Michael & Shareef, Riaz & da Veiga, Bernardo, 2005. "Risk Management of Daily Tourist Tax Revenues for the Maldives," Natural Resources Management Working Papers 12128, Fondazione Eni Enrico Mattei (FEEM).
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    Cited by:

    1. Levent Selman GOKTAS & Serkan Polat, 0. "Tourist Tax Practices in European Union Member Countries and Its Applicability in Turkey," Journal of Tourismology, Istanbul University, Faculty of Economics, vol. 5(2), pages 145-158.
    2. Jakson Renner Rodrigues Soares & Paula Remoaldo & André Riani Costa Perinotto & Larissa Paola Macedo Castro Gabriel & María Elvira Lezcano-González & María-Dolores Sánchez-Fernández, 2022. "Residents’ Perceptions Regarding the Implementation of a Tourist Tax at a UNESCO World Heritage Site: A Cluster Analysis of Santiago de Compostela (Spain)," Land, MDPI, vol. 11(2), pages 1-18, January.
    3. Gerum Alexander, 2014. "Untersuchung der Auswirkungen des ermäßigten Mehrwertsteuersatzes auf den Investitionsstau im bayerischen Beherbergungswesen," Zeitschrift für Tourismuswissenschaft, De Gruyter, vol. 6(1), pages 83-90, May.
    4. Juin‐Jen Chang & Lee‐Jung Lu & Shih‐Wen Hu, 2011. "Congestion Externalities of Tourism, Dutch Disease and Optimal Taxation: Macroeconomic Implications," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 90-108, March.

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    More about this item

    Keywords

    Taxes; Tourism; Environment; Spain;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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