Dumitru Luca, president of ANAT: "Increasing VAT in tourism would take us out of the European market"

A possible increase by the Government of the value added tax in tourism would take us out of the European profile market, said yesterday, Dumitru Luca, the president of the National Association of Tourism Agencies (ANAT), during a press conference held at headquarters of the National Council of Small and Medium Private Enterprises in Romania.

"Only two countries have a standard VAT for tourist services: Great Britain and Denmark, the rest of the European states applying a reduced rate, which has the role of eliminating discrepancies regarding tariffs. These tourism rates are set in advance, at least one year in advance. In the conditions where a tax increase would occur, it cannot be rolled into tariffs - due to previously concluded contracts - and it will explode in the profitability margin, in the investment budgets and we will end up in a situation where we can no longer honor our contracts . A possible increase in VAT in tourism would completely take us out of the European market", said Dumitru Luca.

The President of ANAT recalled that the tourism sector benefited a few years ago from a facility - the specific tax - which led to the taxation of the most difficult to control area of this economic activity. Although it had started to operate within the prescribed parameters, the Government eliminated the specific tax, preferring to check tens of thousands of tourism operators, who until now were charged based on that tax, which represents a reliable source of budget income, stated Dumitru Luca.

Another problem faced by economic agents in the hospitality industry is the incoming, which contributes only 14% to tourism revenues, the remaining 86% being the contribution of Romanian tourists.

"In addition to incoming, we also suffer in terms of tourism promotion. It is embarrassing to allocate through the state budget only 1.5 million euros per year for tourism promotion, an amount that is below the promotion budget of an average European company in this sector of activity", said the president of ANAT, who also criticized the lack state support for economic operators from our country that participate in tourism fairs abroad.

The entrepreneurs in the field are also dissatisfied with the current law regarding the OMDs - the management organizations of the tourist destination.

"The Ministry of Economy, Entrepreneurship and Tourism recently put into public debate the development strategy in tourism, which lacks the national destination management organization. This is despite the fact that we have several OMDs that were established on the basis of the old law at the local or regional level and that have worked very well. Unfortunately, now, according to the new law, these organizations cannot transform into OMDs, which shows us that there is a need to amend the normative act", stated Dumitru Luca, who also said that the OMDs should benefit of the amounts collected by local administrations under the title of tourist tax, amounts that are currently used for other purposes by town halls or county councils, than for the purpose of tourism development.

Regarding the holiday vouchers, the president of ANAT believes that they must be maintained and that it is necessary, after passing the Senate, that in the parliamentary session that will start next week, the Chamber of Deputies approves the bill allowing private companies to grant holiday vouchers to their own employees.