Cyprus Tourist Business Association (STEK) requested on Friday the imposition of a lower Value Added Tax in the hotel industry from the Parliament and the Ministries of Tourism, Finance and Labour. STEK emphasized that in most European countries with a developed tourist industry “the VAT is lower compared to the VAT imposed for other economic activities”.

The French hotels, for example, pay a VAT of 5.5% against 19.6% (normal VAT rate), Spanish hotels pay 7% against 16% and Italian 10% against 20%.

“The lower VAT in the hotel industry provides for the drop in expenditure of the hotel stay and board to increase the attractiveness and competitiveness of the tourist countries. Besides tourism, which represents 20% of the Cyprus GDP and almost 50% of the goods and service exports, will benefit the national economy and not the hotel units exclusively”.

“As a result, the reduced VAT cannot be a generous allotment on behalf of the state, since it does not show the profit of the hotel industry given that the VAT is paid by the consumers – tourists. The lower VAT submitted by the tourists, the more competitive tourism becomes”, STEK stressed.