Sojourn Tax Again Causes Friction

The increase of the sojourn tax -imposed on hotels and other private businesses that operate in tourist regions by local governments- is unconstitutional and without substantial benefit, said the Hellenic Chamber of Hotels.

The Central Local Union of Municipalities and Communities of Greece (KEDKE) recently announced the intention to raise the tax from 0.5 percent back to two percent. The sojourn tax was reduced from two percent to 0.5 percent last January by the previous government.

“The reduction of that fee to 0.5 percent was the most effective of the measures to support tourism businesses amid the economic crisis, which continues to this day with adverse consequences for all businesses of the industry,” the chamber said in an announcement. Before the reduction, it was said that the sojourn tax corresponded to 20 percent of profits for hotels.

The chamber added that the fee, which is charged “selectively, unfairly and abusively” to hotels, is “an outdated charge from the time when there was a system of administered prices.

“It is a myth that the fee is collected from hotel guests to be given to local authorities,” the chamber said.

The chamber believes that resources from the government should fund the services provided by local authorities.

The Athens-Attica Hotel Association stressed that the Culture and Tourism Ministry must pay close attention to the “threat” of a sojourn tax increase as it would not help Greek tourism and would only be a “setback” of an already solved issue.

The association reminded that the sojourn tax never functioned on retribution terms thereby there is no reason for its existence and enforcement.

On its part, KEDKE said that if the increase is denied then the government must replace it with something else.

According to Greek press, new Minister for Interior, Decentralization and e-Governance Yiannis Ragousis had characterized the sojourn tax initial reduction as a “bad decision” and said he would focus on the increase of the fee.