WHILE the Balearic government is about to embark on the biggest crackdown yet on the so-called illegal accommodation sector in the Balearics, the Majorcan Hotel Federation has serious doubts about the effectiveness of the campaign. According to the Federation the illegal accommodation sector is not hidden, it is advertised on the Internet, in the German press and other media. These kinds of establishments don't pay income tax or VAT and still won't be paying taxes once the tourist tax is introduced. We have serious doubts about the effectiveness of this latest crackdown, although we do recognise the good intentions of the government in trying to bring some form of order to the property sector. This latest wave of inspections will involve four Balearic Ministries, Finance, Environment, Tourism and Health, which are the four main Ministries which are supposed to try to expose the submerged economy in the Balearics which gets away with not paying thousands of millions of pesetas in taxes. The government explains that this latest crackdown is not just about illegal and non registered holiday accommodation, but about a whole range of other related activities.
We have been working for months in a bid to transform the illegal sector in to an economic activity which meets all the rules and regulation, Tourism Minister Celesti Alomar said. The government has worked out that around 1.5 million tourists stay in non registered and illegal accommodation each year in the Balearics, while three million stay in hotels. The government knows that the only flaw in the tourist tax plan for the moment are these 1.5 million tourists and the illegal accomodation market and the main objection from the hoteliers, who are against the tax, is that such a large percentage of tourists will slip through the loop, unless the noose is tightened of the non registered holiday accommodation market. The government claims that 75 per cent of the tourists which come to the Balearics stay in registered accommodation, 15 per cent in second homes, a similar amount on cruise ships or yachts and the remaining 15 per cent in illegal accomodation.