CC BY
0The Prospect of Introduction of Tourism Tax as a Source of Increase of Own Income of Yerevan City
Martirosyan Diana A.
PhD Student of Financial faculty of Department offinance of Armenian State University of Economics (Yerevan, RA)
https://orcid.org/0009-0003-1630-5Q28 diana.martirosyan.970@gmail.com
UDC: 336.1:352; EDN: DTNRBA; JEL: E64, H71, L83, Z32 DOI: 10.58587/18292437-2024.4-150
Keywords and phrases: Tourism tax, revenues, local infrastructure and resources, tourism sector, development, Yerevan city
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Перспектива инвестирования туристического налога как источник увеличения
собственных доходов города Еревана
Мартиросян Диана А.
Аспирант кафедры финансов, Финансового факультета Армянский государственный экономический университет (Ереван, РА)
Аннотация. Чтобы получить общее представление о финансовом секторе города Еревана, следует изучить финансовые возможности Еревана. Концентрируя людей, ресурсы и инвестиции в одном месте, крупные города получают возможность влиять на экономическое развитие, стимулировать инновации и углублять социальные отношения. Данное обстоятельство является основанием для необходимости изучения особенностей финансового управления крупных городов и выявления проблем, поскольку они являются одной из основных движущих сил программы развития страны.
Одной из основных проблем города Еревана является эффективное управление ограниченными ресурсами, обеспечивающее реализацию не только права, но и возможности предоставления качественных государственных услуг населению общины. В этой связи мы подчеркиваем обеспечение стабильной и гибкой базы финансовых ресурсов, эквивалентной реализации полномочий, возложенных на ереванскую общину законом, использование возможностей для формирования собственных финансовых ресурсов и реализации независимой финансовой политики.
Регион и мир, 2024, № 4 (53)
Используя ресурсы города Еревана, мы можем обратить внимание на поток туристов, что является возможным способом увеличения собственных доходов Еревана. Туристические налоги представляют собой небольшие сборы, обычно взимаемые косвенно предприятиями размещения или отдыха и обычно идут на проекты по содержанию и развитию города, а также на обеспечение благоприятных условий для туристической индустрии. Ключевые слова и фразы: Туристический налог, доходы, местная инфраструктура и ресурсы, туристический сектор, развитие, город Ереван
Tourist tax (also called tourist or city tax) is a tax paid by incoming tourists when staying at hotels, resorts, hostels or other types of accommodation in many European cities. It is implemented to support local infrastructure and improve tourism.
City tax is not included in the room price and is usually paid upon check-out. The amount depends on the type of accommodation, location and season.
Depending on city regulations, the tourism tax amount may be a percentage of the room rate or a flat fee (calculated per person per night). The flat fee also sometimes depends on the type of room. For example, in Amsterdam it is 7 percent of the room rate plus 3 euros per person per night.
Common exceptions include children (ages vary), people with disabilities, bus drivers, tour guides, and some other categories [1].
Some municipalities may require tourists in their area to pay a tourist tax.
Tourist tax must be paid by the holidaymaker to the host, hotelier or owner or authorized person. The money collected is then returned to the municipality. There may be privileges, for example: children under 18 years of age, persons with a seasonal employment contract working in the municipality, a person occupying a space whose rent is less than the amount set by the municipality, etc. [2].
Below I will present the tourist tax rates for some countries.
Everyone has to pay tourist taxes, but depending on the city, there are some exceptions.
Manchester is the first and only UK city to levy a £1 tourist tax on visitors staying in hotels or rented accommodation in the city centre. Other top UK destinations are planning to introduce tourist taxes in the coming years.
There are currently no tourist taxes in Wales, but discussions are underway.
In the Netherlands there is a tourist tax of €3 per person per night, payable locally. Some hotels have it included in their rates and some don't.
The amount of tourist tax in Italy depends on the city. Rome will charge 3-7 euros per person, per night. Prices in other cities range from €2 to €5.
In Switzerland, the amount varies from city to city, costing around €2.20 per person per night [3].
The concept of a tourist tax is not new, it has long been a practice in many European countries such as Greece, Spain and Germany, and hotel taxes are standard in many destinations, including in the
US states. The impact of the pandemic on the tourism industry has been severe, with hotels, restaurants and hospitality venues closing, people who depend on tourism for their livelihoods suddenly suffering huge losses and the money the government relies on for development and maintenance has dried up. As a result, many countries have decided to introduce a tourism tax from 2024 to support local needs. 2024 Iceland resumed its tourist tax in January after a hiatus from the pandemic. The Indonesian government has started taxing travelers visiting Bali from February 14, 2024.
In 2024, the UK is implementing a new system called the Electronic Travel Authorization (ETA), whereby visitors from the US, Europe, Australia and Canada must apply for a permit and pay to enter the country.
Next year, the EU will introduce a new tourist visa, under which non-EU nationals traveling outside the Schengen area must pay €7 (about $7.57) and fill out an application to enter the country [4].
More and more destinations around the world are introducing tourism taxes as a way to combat overtourism, which can help mitigate the often negative effects of tourism and possibly reduce visitor numbers. They are a controversial tactic and far from an ideal solution, but they are also a direct result of overtourism and are likely to continue.
By increasing the cost of visiting certain areas, a tourist tax can help reduce overcrowding and make the experience more bearable. This can help avoid 'overtourism', where locals or visitors feel there are too many tourists, leading to a poor quality of life.
Collecting tourism taxes is not a complicated process, and given that they can be easily modified based on different types of travelers and the benefits they bring, or different seasons of the year, it is clear why some local governments have used them as a solution to overtourism part.
There is discussion that the tourism sector is not as favorable as it was supposed to be, for example, the presence of too many tourists can affect both the environment and the locals.
Looking at it from the opposite point of view, tourism, in addition to bringing profit, also affects employment and infrastructure activation. makes its profits from places, people and the environment, but produces very little.
At the same time, from the point of view of big cities, every time there is talk about limiting the number of tourists or raising prices, there are accusations of elitism. This ignores the fact that our right to travel simply does not override the rights of local people to use their homes or the need to preserve the environment.
The Aviasales website for searching for airline tickets has compiled a list of cities where tourists are not happy to receive them because of "overtourism".
The experts assigned the first place where tourists are not expected to the Italian city of Venice. In 2017, there were 5.3 million tourists out of a population of 633,000, and the city authorities imposed fines for swimming, cycling and littering in the canals.
Mass tourism is also opposed in Barcelona, where, for example, at the end of June, members of the extreme leftist organization Edvant organized an action against the large number of foreigners arriving in the city. Protests have also been held in Amsterdam, as residents of the city are unhappy with the noise, littering and rising prices. In this regard, the authorities have banned the construction of new hotels and increased tourist taxes.
Restrictions have also appeared in Dubrovnik (Croatia) and the island of Santorini (Greece). no more than eight thousand visitors per day. And the island of Boracay in the Philippines was closed to tourists for six months from April 2018 due to pollution [5].
Tourism planning must consider the negatives as well as the positives of higher visitor numbers, and recognize that "more" does not always mean "better". Instead, the focus should be on responsible tourism planning and management. It means the following.
• Identify the type of tourist that best suits the destination, rather than trying to attract them all.
• Effective visitor management such as pre-booked tickets, timed entry and seasonal pricing.
• Controlling visitor numbers by reducing cruise and flight arrivals, reducing destination marketing and tightening restrictions on hotel room rentals.
• Diversification of tourism in a wider area to take the strain of over-popular destinations [6].
On January 1, 1994, the Paris City Council established a tourist tax ("taxe de séjour") applicable to all forms of paid accommodation: hotels and apartments, furnished accommodation, campsites, etc.
While in France, visitors are usually asked to pay a tourist tax, which is imposed by local authorities [7]. To calculate the actual tourist tax amounts, multiply the applicable rate for each
category of accommodation by the number of nights and taxable persons. Children under the age of 18 are exempt from the tax.
Additional tax may also be added by region. For example, the Ile-de-France region recently introduced an additional "Grand Paris" tax.
Tourist taxes are usually not included on tours to France and must be paid locally [8].
The Paris tourist tax is an important source of revenue for the city and plays an important role in maintaining Paris' status as one of the world's leading tourist destinations. It is important for visitors to know about this tax when budgeting for their trip to Paris.
The tourist tax aims to contribute to the development and promotion of tourism by allowing French municipalities, including Paris, to finance costs related to tourist arrivals or the protection of natural spaces. their course. Other European countries (Germany, Italy, Switzerland, Austria, Netherlands and Greece) have also adopted the decision to introduce a tourism tax.
All travelers staying in one of the following types of accommodation are legally obliged to pay tourist tax: palaces, tourist hotels, apartment hotels, youth hostels and other accommodation.
The tourist tax in Paris ranges from €0.65 (for 1 and 2 star campsites) to €14.95 (for chalets) per person per night.
From January 1, 2024, the tourist tax in Paris is €5.20 per person per night for a 3-star hotel stay and €8.13 per person for a 4-star hotel stay.
This amount must be displayed in the accommodation and must appear on the invoice issued, but is not always included in the accommodation price. Therefore, it is common for the hotelier or owner to ask the traveler to pay it separately.
Below are details on the amount of tourist tax in Paris by category of accommodation:
Table 1. Tourist tax rates applicable in Paris as of
January 1, 2024: [9]
CATEGORIES OF ACCOMMODATION NET RATES PER PERSON AND PER NIGHT
Palaces €14.95
Hotels and aparthotels, furnished rentals: 5 stars €10.73
Hotels and aparthotels, furnished rentals: 4 stars €8.13
Hotels and aparthotels, furnished rentals: 3 stars €5.20
Hotels and aparthotels, furnished rentals: 2 stars €3.25
Hotels and aparthotels, furnished rentals: 1 star. €2.60
PeeuoH u Mup, 2024, № 4 (53)
Holiday villages: 1, 2 and 3 stars. Bed & Breakfasts. Youth hostels
Campsites: 3, 4 and 5 stars €1.95
Campsites: 1 and 2 stars €0.65
Accommodation waiting for classification or without classification Proportional taxation 5% of the cost of the night excluding tax with a ceiling of €14.95
Based on the results of the studies, we now turn to the implementation of a tourism tax in the city of Yerevan, which can generate revenue for the city while helping to manage the impact of tourism on local infrastructure and resources.
Here are some options on how to apply the tourist tax in Yerevan:
1. Residence tax is one of the most common forms of tourist tax. Visitors staying in hotels, hostels, guest houses and other accommodation will pay an additional fee per night. The tax can be set as a fixed amount per person per night or as a percentage of the accommodation cost.
2. Entrance fee to attractions for tourists visiting Yerevan's popular attractions may be charged an entrance fee. This will include places such as museums, historical sites and cultural attractions. The tax may vary depending on the popularity of the destination and operating costs.
3. City-wide tourist pass. Yerevan may introduce a city-wide tourist pass that includes access to various attractions and transportation services in the city. The pass can be sold at a fixed price, with a portion of the revenue going to the city as a tourist tax.
Before implementing any form of tourism tax, thorough research, consultation with stakeholders, and assessment of potential impacts on tourism and the local economy are required. In addition, effective enforcement mechanisms and systems for tax revenue collection and management must be put in place to ensure the success of the initiative.
A portion of tourism tax revenue can be allocated to environmental conservation and sustainability initiatives to mitigate the impact of tourism on the city's natural resources and heritage sites.
Of course, an exemption will apply to some visitors, the tourism tax may exempt certain categories of visitors, such as residents of Yerevan or tourists who are there for treatment or business purposes, to ensure fairness and encourage certain types of tourism.
The principle of "transparent use of revenues" can also be applied: it is very important for the city to clearly communicate how the revenue from the
tourism tax will be used. This transparency can help build trust among tourists and ensure that the tax is seen as a fair investment in the development and maintenance of the city.
Determining the specific amount or percentage of a tourism tax in Yerevan will require careful consideration of various factors, including the city's tourism infrastructure, desired revenue targets, competitiveness of the local tourism industry, and potential impact on tourists.
Here are some guidelines to help determine the amount or percentage of tourism tax:
1. Of course, it is an important condition to study even more tourist taxes, which are set by other cities or destinations comparable to Yerevan, in terms of infrastructure and economic conditions. This can provide insight into common practices and applicable tax rates.
2. Estimate the costs of maintaining tourism-related infrastructure and services in Yerevan, such as historic sites, public spaces, transportation systems, and waste management. The tax rate must be sufficient to cover these costs while ensuring the sustainability of tourism development.
3. To analyze average spending patterns of tourists visiting Yerevan, including spending on accommodations, dining, sightseeing, transportation, and shopping. The tax rate can be designed to cover a reasonable portion of tourist expenses without significantly affecting their total travel expenses.
4. Consider the possible impact of the tourist tax on the competitiveness of Yerevan as a tourist destination. Setting the tax rate too high may have a bad effect on the number of visitors, and our goal is also to increase the number of tourists, while setting it too low may not generate enough revenue to support tourism development and management efforts.
5. Collaborate with relevant stakeholders, including tourism representatives, local businesses, residents and government agencies, to gather input on the proposed tax rate and ensure broad support for the initiative.
6. Implement mechanisms to periodically review and adjust the tourism tax rate based on changing economic conditions, tourism trends and the city's evolving needs. This is the lever to ensure that the tax remains effective and enforceable over time.
7. Consider applying differentiated tax rates based on factors such as accommodation type (eg luxury hotels vs budget hostels), length of stay or tourist's country of origin. This approach can adjust the tax burden to different segments of the tourism market and mitigate any disproportionate impact.
CONCLUSION
Originally introduced by major cities, the tourist tax was introduced with the aim of alleviating over-tourism and generating revenue from large numbers of travelers.
The issue of introducing a tourism tax has conflicting effects and opinions, its application can have both positive and negative aspects, and its overall impact depends on various factors, such as the specific context, how it is implemented, and the intended use of the revenue generated. Whether the introduction of a tourism tax is good or bad depends on how effectively it is designed, implemented and manages to balance revenue generation with destination sustainability and competitiveness.
Emphasizing the fact that for the city of Yerevan, we can consider the sustainable development of tourism and the increase in the flow of tourists, to ensure which it is necessary to create sufficient conditions, based on which the application of the tax should be carefully planned and implemented so that it does not have an adverse effect on tourism. A properly sequenced strategy should be developed for sustainable tourism development and proper planning and application of the tourist tax. The tax rate should be reasonable and not overly burdensome to visitors. This can help maintain the destination's appeal while generating revenue.
Ultimately, finding the right balance between generating revenue for the city and maintaining Yerevan's appeal as a tourist destination is critical. It may require periodic adjustments and continuous monitoring to optimize the efficiency and fairness of the tourism tax regime.
List of literature
1. AltexSoft - Technology & Solution Consulting Company https://www.altexsoft.com/glossarv/citv-tax-tourist-tax/ (accessed 01.04.2024)
2. The official website of the French administration https://www.service-
public.fr/particuliers/vosdroits/F2048?lang=en, (accessed 01.04.2024)
3. Authentic Europe/Tourist taxes in Europe https://www.authentic-europe.com/travel-info/during-your-tour/tourist-taxes. (accessed 09.02.2024)
4. Conde Nast Traveler https://www.cntraveler.com/storv/tourist-taxes-around-the-world, (accessed 10.04.2024)
5. Industry news by tourism experts https://www.tourex.am/named-cities-opponents-of-tourists/, (accessed 08.04.2024)
6. Tourist taxes - what are they, and do they work https://www.responsibletravel.com/copy/tourist-taxes, (accessed 01.04.2024)
7. Paris hotels, Tours and Attractions http://www.paris-paris-paris.com/tourism/money/tourist tax, (accessed 09.02.2024)
8. Authentic Europe/Tourist taxes in Europe https://www.authentic-europe.com/travel-info/during-your-tour/tourist-taxes, (accessed 09.02.2024)
9. Official website Paris je t'aime - Tourist Office, Tourist tax in Paris https://parisj etaime.com/eng/article/tourist-tax-a616, (accessed 09.02.2024):
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