BTW: plans to raise VAT are serious threat to German tourism sector

September 7, 2012

BTW: plans to raise VAT are serious threat to German tourism sector

The national association of the German tourism industry (Bundesverband der Deutschen Tourismuswirtschaft; BTW) criticized plans to eliminate the lower VAT rate for hotel accommodation.

The government of the German federal state of Schleswig-Holstein had announced their intention to introduce a draft bill to that effect in the upper house of German parliament in September of this year. "Schleswig-Holstein as tourist destination is doing a disservice to itself and the entire German tourism industry, because the reduced value-tax rate is actually having positive effects. Businesses are investing massively into their operations and are thus also boosting Germany's attractiveness as travel and congress destinations", said BTW president Klaus Laepple.

Topical forecasts anticipate investments worth more than EUR 800 million in 2012 alone as well as 6,000 hirings in the hotel industry. "The entire service-providing chain in the tourism industry, the job market and above all our guests stand to benefit from these investments", said Laepple. On top of that, he considers the reduced VAT rate to be nothing less than compensation for unfair competition from the majority of other European countries. Lower VAT rates apply for the hotel industries in 23 of the 27 EC countries.

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