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Taxing Tourism in Spain: Results and Recommendations

Xavier Labandeira (), Alberto Gago, Fidel Picos () and Miguel Rodriguez ()
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Alberto Gago: University of Vigo

Authors registered in the RePEc Author Service: Alberto Gago Rodríguez

No 2006.40, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper analyses the foundations, possible applications and the effects of tourism taxation in Spain. The article begins with an analysis of the economic and environmental reasons for taxing tourism, which would seem to call for taxes based on the principle of benefit, for either revenue or corrective purposes. Subsequently, we describe the praxis of tourism taxation in Spain, with special mention being given to the now repealed Balearic ecotasa. Finally, the effects of two fiscal modifications with revenue or corrective objectives are studied through the use of an applied general equilibrium model developed for the Spanish economy. We thus see that a 10% tax on lodging brings in significant public receipts, increases social welfare and has no effect on the environment. On the other hand, an increase of VAT rates on tourism-related sectors could have the same effects on tourist expenditure but at the costs of greater impact for Spain’s economy.

Keywords: Taxes; Tourism; Environment; Spain (search for similar items in EconPapers)
JEL-codes: H22 L83 Q28 (search for similar items in EconPapers)
Date: 2006-02
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-tur
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Working Paper: Taxing Tourism in Spain: Results and Recommendations (2006) Downloads
Working Paper: Taxing Tourism in Spain: Results and Recommendations (2006) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2006.40

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