Posted by: Marian Visser van Klaarwater Posted on: Thursday 06 January 2011, 13:33

Budapest municipalities impose last minute tax on hotels In the final days of December several local governments in Budapest announced that they would be responsible for the collection of the tourism tax, which was increased from 1 January.

4% of revenues

Hoteliers were only informed of the shock news via the websites of the municipalities. The amount of tax being levied is 4% of net hotel revenues in the 12th and 13th districts (the same percentage applies to hotels in the 5th district but this had already been announced), and HUF 431 and 300 (1.5 and 1.1 euros) in the 8th and 9th districts, respectively, per night, per guest. Formerly the Municipality of Budapest was in charge of collecting the 3% tax

Hike

Hoteliers claimed that as the hike in tax wasn t announced earlier, they cannot charge it to guests as room rates were published earlier. Besides this it will only serve to further worsen their competitiveness and business prospects. Furthermore, some municipalities are also increasing taxes on hotel sites. The Hotel Association of Hungary were reported to be shocked by the sudden changes, which represent incremental additional costs to the hotels and worsen the situation of tourism in Budapest. As a consequence, the HAH have asked politicians to review these taxes and open discussions with trade representatives and they also suggest that taxes should be used for tourism purposes.