At present, the tourist tax applies to cruise ships that stay for twelve hours or more. This will change.


It is inevitable that there will be an increase in the tourist tax next year. But it has yet to be decided what the increase will be and whether it will be across the board or be targeted at specific tourist profiles.

These decisions will depend on Balearic parliament approval of the government's spending ceiling for the 2018 budget. The cabinet is due to set this ceiling next week and wants parliament's approval as soon as possible. Parliament isn't due to reconvene until next month.

An option said to be under consideration is for an increase of the lowest hotel rate* (currently one euro per night for one, two and three-star accommodation). This would apparently act as a "disincentive" for a tourist profile deemed to have low spending power. An alternative option is an increase of the highest rate. This might mean a rise from two to three euros for four-star superior and five-star accommodation.

Other changes will be to the tax for cruise ship passengers and to the period when the 50% discount applies. Both of these have previously been flagged up. At present, the tax only comes into effect if cruise ships are in port for twelve hours or more. In future, there won't be a minimum time, so the tax will apply to all ships. The current rate for cruise ships is one euro.

Between November and April there is a 50% reduction in the tax. It seems certain that this discount will no longer apply to April; it may also be eliminated for March as well.

Exemptions, such as there being no tax for under-16s, are unlikely to be changed. Nothing, as yet, is being said about the current 50% cut in the tax after eight nights.

The government is looking at increasing its spending by 200 million euros next year. Only part of this would come from tourist tax revenue. The rest will be as a consequence of general economic improvement. The government's policy is for "expansive budgets" but this is inhibited by national government limitations. This is why the tourist tax is looked upon as an additional source of revenue and why it is therefore also a general tax. Although there are specific purposes for spending tourist tax revenue, the government has admitted that it is a general tax. Initially, it said that it wasn't.

The politics of the government's "pact" do have a role to play. Podemos made clear some while ago that an increase in the tourist tax would be a requirement for it giving its approval to the 2018 budget.

An alternative source of additional revenue - a tax on hire cars - has been ruled out. The government has concluded that this wouldn't have any effect in reducing the number of hire cars.

* There is a lower rate still: one of fifty cents that applies to the likes of hostels.