The tourism minister Biel Barceló.

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A study commissioned by the Balearic government to assess any negative impact of the new tourist tax, which comes into effect on 1 July, has concluded that the levy will lead to a 0.8 per cent fall in spending by holiday makers.

The findings of the survey were presented yesterday by the Balearic vice-president and minister for tourism, Biel Barcelo, who also clarified that the analysis highlights that demand could increase by four per cent.

The minister, who was accompanied by the president of The City Transformation Agency, Antoni Vives, who carried out the study, explained that the tax will have a "minimal" impact on the price of a package holiday because it will amount to around one perc ent of the total cost of a holiday in the Balearics.

According to the study, despite the unlikely reduction in demand, if it should occur on the basis of observed patterns and current levels of spending and tourism flows, the impact on tourism expenditure would be a maximum of 0.8 per cent. The worst-case scenario could be a reduction of overnight stays and tourist spending, and the terms of the negative economic impact would be around 36 million euros of GDP and the loss of some 741 jobs.

However, as the projected revenue raised by the tax is some 75.8 million, this would compensate for any downturn. The study does, though, raise a hypothetical scenario of a four per cent increase in the number of overnight stays due to the current international situation. This net increase of four per cent would result in an increase in tax revenue to 78.9 million euros.

If that does turn out to be the case, then this will lead to an increase of 18.18 million euros in GDP and the creation of 732 new jobs.