FlyerTalk Forums - View Single Post - Foreign tourists will be exempt from IVA on accomodations
Old Jan 14, 2017 | 5:13 am
  #41  
abeyro
 
Join Date: Aug 2009
Posts: 215
I still wonder what gains the goverment will get from giving up VAT on hotel stays by foreigners?

At times when the blue rate versus the oficial rate was ~+ 30- 40%, it made sense , but now?

Also, what will stop the hoteliers to "adjust" the price with VAT refund to the level it was with VAT added?
Once the public got used to a price, say, 100+21%= 121, they will easily accept a price 121+VAT knowing that the final price to them will be still the same 121
In such a scenario, the hotel wins, no change for foreigners and the only loser is the goverment.

In another secenario, when hotel net prices are kept at previous levels: there will be no change for the hotel, foreigners will gain but, again, the government will see 0 as its VAT revenue...
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