If the current discriminatory licence fees for self-catering farmhouses were standardised into one nominal fee, the government would probably collect more revenue through VAT, according to the Gozo Tourism Association.
Reacting to the story that appeared in this newspaper last week, GTA secretary Joe Muscat said the current structure was leading to unfair competition for bona fide businessmen targeting the tourist market.
Licence fees for self-catering units are levied depending on whether the property is rented out to foreigners or Maltese patrons. While the licence for a farmhouse, villa or apartment rented out to Maltese clients is a mere €16, that for property rented out to foreigners shoots up dramatically and can be as high as €500 for a villa.
“This structure of fees does not make sense and the GTA has long proposed a nominal feasible fee structure that does away with the distinction between foreign and Maltese patrons,” Mr Muscat said.
The GTA is confident that a drop in revenue from licence fees would be adequately compensated by higher income from VAT as more operators legitimised their business.
The Tourism Parliamentary Secretariat had said it was making submissions to the Finance Ministry on the matter but discussions have long been under way.
Self-catering accommodation in Gozo is a mainstay of that island’s economy and provides more than double the number of beds in hotels and guesthouses – even though the GTA lamented a lack of statistical data on the sector from the National Statistics Office.
According to Mr Muscat, operators have repeatedly reported lack of business over the past few years because of unfair competition created by “several hundreds” of unlicensed farmhouses and self-catering apartments.
The Malta Tourism Authority has embarked on an exercise to identify these properties and bring them in line with regulatory procedures. Suffice to say that last year, two villa owners were even fined by the court for operating without the necessary licence.
While applauding the MTA for its initiative, Mr Muscat noted that most of the unlicensed properties were applying for the domestic licence.
“One needs to question whether there is any regular and tangible control that establishes the correct use of these properties according to the licence they are paying,” he said.
The GTA is proposing a common licence for single self-catering apartments irrespective of the clientele category; a common licence for a block of self-catering apartments, owned by the same licensee, irrespective of whether they are rented to foreign or domestic tourists; a common licence for farmhouses and villas irrespective of who rents them; and a common licence for a cluster of farmhouses or villas owned by the same licensee.
“Reforming the licence fee structure and the establishment of correct and more realistic regional statistical data on this important segment of the Gozitan tourism industry would be in line with the government’s policy regarding the distinctiveness of Gozo,” Mr Muscat said.