Tourist tax already earned Cape Verde 8 times more in 2022

Cape Verde collected €5.3 million in ten months with the fee paid obligatorily by tourists, more than initially expected by the Government and eight times more than 2021, according to official data compiled today by Lusa.

According to a report by the Ministry of Finance on budget execution from January to October, receipts from the tourist contribution amounted to Esc582 million (€5.3 million) in this period, equivalent to 122.7% of what was budgeted by the Government for the year 2022, which is Esc475 million (€4.3 million).

This amount represents “an exponential increase compared to the amount charged in the same period of 2021”, which “demonstrates the gradual recovery of tourist activity”, reads in the report by the Ministry of Finance.

The tourist contribution was introduced by the Cape Verdean Government in May 2013, with all hotels and similar units obliged to charge Esc220 (€2) for each overnight stay of up to ten days, for each tourist over 16 years old.

The performance of this rate in the first ten months of 2022 compares with just Esc73 million escudos (€665,000) raised in the same period of 2021.

The Minister of Transport and Tourism, Carlos Santos, said on November 11 that 2022 is going to be a “very good year” in tourist demand for the archipelago and that he does not expect negative impacts from the announced increase in the tourist tax charged in hotels.

“This year we are already running for ten months, from January to October, and we have already received and welcomed about 80% in terms of number of tourists, of what was the same period of 2019”, said the minister, in parliament.

“This means that we are going to have a very good year and 2023 will also be a year of recovery”, he added.

After registering a record 819,000 tourists in 2019, the sector, which accounts for 25% of Cape Verde’s Gross Domestic Product (GDP), saw demand drop by more than 60% in 2020, due to the restrictions imposed to contain the covid-19 pandemic.

Meanwhile, the tax obligatorily paid by tourists in Cape Verdean hotels will increase by 25% from January, to Esc276 (€2.5) per night, with the Government hoping to raise €8.6 million throughout the year from 2023.

According to the State Budget law for 2023, already approved by parliament, the Government foresees this change in article 24, and in the budget support documents it states that it estimates to raise Esc946 million (€8.6 million) with this revenue next year.

“With the commitment we have, which is to eliminate extreme poverty and reduce absolute poverty, we understand that it could be a way to finance the ‘More’ fund, which allows making a strong investment in the social area, in the construction of day care centers, spaces of time for youth, spaces for the elderly and we understand that we could increase by 50 cents, that is Esc50, the tourist tax paid by tourists when they stay overnight in hotels”, replied Minister Carlos Santos, questioned by deputies.

Revenues from this fee halved from 2020 to 2021, renewing a minimum of Esc145 million (€1.3 million), according to a previous report by the Ministry of Finance.

This was a 51% drop compared to the Esc296.6 million (€2.6 million) in 2020 – revenue essentially obtained in the first quarter -, the year in which from March to October Cape Verde suspended international air connections to contain the transmission of covid-19, which resulted in a 70% drop in tourist demand.

In 2019, this tax guaranteed a historic maximum of Esc992 million (€8.9 million) in revenue.

With information from A Semana

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