The Central Union of Municipalities and Communities of Greece (KEDKE) recently gave a negative response in regards to the sojourn tax reduction from two percent to 0.5 percent.
The sojourn tax, which is said to correspond to 20 percent of profits for hotels, is charged to hoteliers and other tourism enterprises by municipalities.
KEDKE reminded that the sojourn tax is charged to customers by businesses who in turn give it to the municipalities, which use it to improve tourist services provided by their cities such as cleanliness, lighting, renovation, etc.
The union says that if the sojourn tax is reduced then the income of municipalities and communities in Greece will decrease by some 120 million euros per year.
According to the prime minister “the loss of income to the municipalities will be replaced by a 20 percent increase of road tax on motor vehicles.”
On its part, KEDKE answered that a road tax increase would not solve anything as funds from such taxes are to be used exclusively for state establishments such as sports centers, daycare centers, school guards, nursing homes, etc., which the state has already “passed on” to the responsibilities of the local governments.
KEDKE’s president, Athens Mayor Nikitas Kaklamanis, said that the union will not discuss the sojourn tax issue unless the government “retracts the announcement of its reduction.
“If this is accepted by the government then the union will assign a study to the Hellenic Agency for Local Development and Local Government to look into the possibility to replace this specific income with something else and not to abolish it,” he said.
Mayor Kaklamanis added that the deadline for this study would be the end of July.