June 13th, 2008

Hotel Association demands drop to 5% VAT on accommodation

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The Hungarian Hotel Association is campaigning for a sharp reduction in VAT charged on hotel rooms from 20% to 5%. According to a KPMG study commissioned by the organization, the move would boost tourism without reducing the government’ Ft 2.6 trillion (€10.5 billion) tax revenue, reports Magyar Hírlap.

The study calculates that increased occupancy in the country’s hotels would cover the shortfall as it would allow total guest nights to grow from 15.4 million today to 17.4 under the new tax system by 2013, as opposed to 15.1 without it. KPMG also believe the tax reduction would also result in a 15% increase in employment in the industry.

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  1. Dave says:
    June 20, 2008 at 1:43 am

    What sort of idiot did the maths on this story? It is not a 15% loss of revenue,it is a 3/4 loss or 75% of the previous amount of tax received. Jeez.

  2. subb says:
    June 20, 2008 at 8:02 am

    yep, you’re prefectly right, of yourse. our bad.