Fear over bed tax

Hoteliers and travel agents have expressed concern at a government levy that will see tourists face a 50c charge for each night they stay in licensed accommodation, such as hotels and guesthouses, come April.

They were reacting to a report in The Times that the government did not plan to postpone again the tax originally announced in the 2009 Budget and that had been intended to come into force on January 1.

The government had decided to delay the introduction of the levy when it became clear the tourism industry was facing a difficult year.

Tourism operators deem the levy as undermining the sector. Hoteliers said they did not like the idea of being tax collectors for the government. The president of the Malta Hotels and Restaurants Association, George Micallef said: "Not only does this tax discriminate against tourists staying in hotels and licensed accommodation but we cannot understand how the government decided last year to postpone the introduction of this tax on the basis of the economic scenario affecting the industry at the time and then decides to introduce it now, when the situation is not any better."

The MHRA said it was convinced that the situation would only worsen if the government went ahead with the increase in utility rates as announced because the rise was too substantial and the new tariffs were simply unsustainable.

The Federated Association of Travel and Tourism Agents said it also strongly disagreed with Finance Minister Tonio Fenech's comments in the sense that the government subsidised the tourism industry to the tune of €33 million. This, it added, insinuated that nothing was generated by the industry in return.

The MHRA, on the other hand, contended that it was no subsidy at all because, when spent, it resulted in substantial returns for the government rather than truly subsidising the industry.

It called on the government to evaluate the adverse effects the increased utility tariffs and the new tax would have on the industry before it was too late.

In reaction, the Finance Ministry pointed out that the spend on tourism had doubled over that of a decade ago and revenue from the tax would be just a fraction of that amount. The tax was similar to other schemes abroad and would only see tourists spending an additional €3.50 on a week's holiday in Malta, the ministry noted.

It stressed that the government was investing to improve seat capacity on air routes to Malta, advertising abroad and attracting more airlines. It mentioned the interest subsidy scheme for hotel embellishment and extension projects, assistance for conference and incentive travel, which had so far attracted 13 conferences and almost 30,000 bed nights to Malta, and assistance for tourism promotion by private operators, which had so far been taken up by 25 applicants.