Tourist tax arguments causing problem for the Balearic budget

The Balearic finance minister, Rosario Sánchez, only has a few days left before her ministry must deliver the initial draft of the 2023 budget to parliament. The accounts are more or less ready, but one issue is causing a problem – the tourist tax.

Two of the three parties of coalition government, Més and Podemos, have been arguing for an increase in the tourist tax rate – for the high summer months at the very least. Sánchez and her party, PSOE, have flatly rejected the idea. One reason is that they don’t want a battle on their hands with the hoteliers, as there is a more important issue – ensuring a decent pay increase from upcoming negotiations that will set new pay scales from April next year.

Putting pressure on hoteliers with a rise in the tourist tax is therefore not considered to be positive. The other parties don’t see it this way. They believe that an increase would send out a message to left-wing voters that measures are being taken to try and reduce tourist overcrowding in summer. The revenue from an increase, they argue, is not the issue, as regional finances are healthy, especially as the government will be receiving additional sources of funding next year.

While the Més and Podemos proposal causes a complication, it is most unlikely to be approved if presented as an amendment to the budget. The opposition parties – the Partido Popular, Vox, Ciudadanos, El Pi – are all against an increase in the tourist tax and would vote with PSOE to ensure that there isn’t one.

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