Taxes on tourists ‘illogical’

A tourist who takes a guided wildlife tour in Sweden pays four times as much tax on his or her ticket as a tourist who visits a zoo. Illogical, says an organization promoting eco-tourism in Sweden.

The rate of Value Added Tax (VAT) on tourist sites varies widely and is governed by a byzantine set of regulations. Different levels of VAT apply to guided tours in museums and guided tours of cities or nights on campsites and nights spent at guest marinas, according to report by the Swedish Eco-Tourism Association (Svensk Ekotourismförening).

A tourist pays 25 percent for a guided city tour – but only if the tour is on foot or bicycle. If the same trip is made on a bus, the VAT falls to six percent. The same applies to boat trips – taking a waterborne sightseeing tour on a steamer and you will pay 6 percent VAT. Rent a kayak and a guide and you will pay the full rate of 25 percent.

Many public bodies, such as museums, are entirely absolved from charging VAT. Voluntary-sector organizations are subject to special rules and varied tax rates.

“It’s worrying that VAT rules in practice disadvantage small-scale eco-tourism. It’s a problem that the most labour-intensive and least profitable part of the Swedish tourism sector is disadvantaged in this way,” said Per Jiborn of the Swedish Eco-Tourism Association.

The association’s report also shows that many small companies in the tourist industry would favour a flat rate of VAT for all companies in the sector. Jiborn called for all Sweden’s political parties to commit to changing the current rules.

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