On 17 November the Constitutional Court opened a case at the request of 61 MPs for the annulment of the tourist tax, as it contradicts the basic law in Bulgaria. Initiator of the subscription is the socialist party BSP, but it has received support from MPs from other political forces.
National Association of Municipalities in Bulgaria has nothing to do with the referral to the Constitutional Court. This was the explicit statement of Ginka Chavdarova, executive director of the association following a question from the BANKER. According to her it comes to a lobbying attack of the hotel business. Mrs. Chavdarova sees no great difference between the previous and current tourist fee and the present tourist tax. Both need to be paid after all, she said. If the court returns the fee, the hotels will still have to pay it, she added.
Tourist tax replaced a year ago the tourist fee payable per nights of accommodation. The levy is calculated on a minimum of 30% of available beds, whether it they really busy or not, while the fee was paid on the basis of overnights at hotels raising doubts about the reported abuses and tax revenues, which led the government to adopt the amendment.
MPs believe that there is a contradiction in the Act on local taxes and virtually some payments duplicate, since the number of nights spent in the month overlap with the municipal tourist tax introduced by decision of the municipal councils.
According to MPs that turned the attention of the Constitutional Court on behalf of hoteliers, the new tax replaces the object of taxation of the actual nights of accommodation and is unacceptably mixing elements of two categories of direct taxes – income and property ones. This is contrary to the rule of law enshrined in the Constitution.
Unauthorized increase of the tourist tax by taxing hypothetical income in the view of the long-term trend in reducing the real incomes of citizens and the tourism enterprises, is contrary to the principles set out in the constitution that taxes shall comply with income, said MPs in their appeal to the Court.
They say the tax was unconstitutional because instead of being in accordance with economic conditions in times of crisis, which could imply reducing the tax, in practice it is substantially and unreasonably inflated – in complete disregard of regulatory function at the expense of the fiscal one. In this case, municipal interests are protected rather than public ones, lawmakers say.
They add that with the introduction of the beds in the calculation of tourist tax hoteliers are put in a disadvantaged situation for doing business, which is also a violation of the basic law of the state.
