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Tallink Group CEO says tourism tax would cause more harm than good

Tallink CEO Paavo Nõgene.
Tallink CEO Paavo Nõgene. Source: Tallink

CEO of Estonian ferry company Tallink Grupp Paavo Nõgene has voiced his opposition to the 'tourism tax' proposed by Tallinn City Council chief Mihhail Kõlvart, on the grounds that it would cause too many difficulties in the sector.

As reported on ERR News, Mr. Kõlvart announced at a press conference on Thursday his support for a small tourism tax which could potentially bring in millions of euros, and be reinvested in Tallinn and tourism-related activities, marketing etc.

Despite Mr. Kõlvart's claims that tourism is booming in Tallinn, with sizeable increases taking place over the last decade, the Tallink chief points out that it is a different picture if you take the shorter term statistics into account.

''According to [statistical compiler] statistics Estonia, there have been 5% fewer visitors from Finland at present than was the case this time last year, and this is one of the most important sectors of the tourist industry here,'' said Mr. Nõgene, speaking to ERR.

''The Port of Helsinki statistics paint a similar picture, with a 4.5% fall year-on-year (y-o-y) in passenger numbers in June 2018, and a 3.1% fall in July,'' he went on.

''Therefore we need to look very carefully at what impact the introduction of a tourist tax might have,'' he added.

Increased number of tourists from Asia may conceal true numbers of Finnish arrivals

This is despite an overall rise in tourist numbers coming to the region from Asia over the summer he noted; these would make up a part of the arrivals from Finland so the actual numbers of Finns may have fallen by more, he claimed.

"The decrease in the number of tourists in Finland has been influenced, among other things, by the alcohol and fuel excise taxes in Estonia, which have had a knock on effect in making services more expensive,'' Mr. Nõgene went on.

''Piling on additional taxes now before reducing other tax rates is not the best idea in today's market situation," he continued.

Mihhail Kõlvart had suggested even a one-euro-per-person-per-night tax level would bring in €2.8 million to the Tallinn City Council coffers, money which could be reinvested in city infrastructure, marketing and the like.

Tallink is the largest passenger and cargo shipping company in the Baltic Sea region, employing over 7,000 people and with a net income of €44 million for 2016, it is reported. Notwithstanding falling tourist numbers from Finland, in 2018 the company enjoyed its most successful month of July to date.

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Editor: Andrew Whyte

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