Estonian Hotel and Restaurant Association is aware of the plan the Ministry of Finance has to increase the accommodation services VAT from current 5 pct to 18 pct. The Association decries the plan from start.

“The Ministry of Finance is preparing for the budget of the coming year and one of the options that has been discussed, as far as I know, is increasing VAT,” the chairman of the board of Estonian Hotel and Restaurant Association and Nordic Hotels OÜ, Feliks Mägus, told aripaev.ee, adding that nothing certain can be said about the subject just yet.

Mägus directly said that the results of it would be bad for Estonia’s tourism. He admitted that tourism isn’t currently doing as well as previously anyway. “That would just be an additional factor,” Mägus added with a quite glum and worried tone.

Can it be said that there will be anything positive about increasing VAT? “No,” Mägus says shortly and adds that he couldn’t possible fathom who could profit from it. “I don’t think the state would. It’s a short-sighted decision,” he criticises.

Mägus didn’t think that the rising excise duty for alcohol and tobacco would influence tourism, but admitted that rising prices in Estonia have influenced it. “All the rising prices of food stuffs and those connected to excise duty are devastating accommodation and catering entrepreneurs.”