Business, / By Sta

Ljubljana- The government adopted a bill aimed at encouraging tourism development on Thursday. Among other things, the bill caps the tourist tax at EUR 2.5 per person per day and introduces a tourism promotion tax. The government expects the latter to bring in nearly EUR 5m annually for the Slovenian Tourist Board (STO) to fund tourism promotion campaigns.

Under the bill, the tourist tax remains in the purview of municipalities, while the promotion tax amounts to 25% of the tourist tax charged in individual municipalities.

There are 212 municipalities in Slovenia, but 95% of tourist tax revenue is collected by only 33 municipalities, whereas over 40 municipalities do not even collect it, Economic Development and Technology Minister Zdravko Počivalšek said after the government session.

Počivalšek noted that when he had become minister, he wanted to increase tourism promotion funds by EUR 20m. "We will not be able to reach that figure with the bill but we will get close," he said.

"In contrast to other possible solutions, this one will not impose additional financial obligations on companies because the duties will be paid directly by the guest," the ministry said ahead of today's government session.

However, the Association of Municipalities and Towns is critical of the promotion tax, labelling it unnecessary. It said that gambling concessions are meant to be the systemic source of promotion funding, accumulating to more than EUR 18m annually.

Even if municipalities raise the tourist tax to EUR 2.5 per night, they would collect only EUR 5.8m in promotion tax at the most, the association said, adding that this is only a third of what gambling concessions bring each year.

Municipalities believe the budget implementation bills should define gambling concessions as systemic funding sources for tourism promotion.

But if the promotion tax is to be imposed, all stakeholders, including the private sector, should contribute equally. "The private sector will feel a direct positive effect because of better promotion and more guests coming to Slovenia."

While the association welcomes many aspects of the bill, it worries that the promotion tax will be so divisive that it will halt the passing of the entire bill.

The bill also lays down the implementation of the tourism development strategy and provides additional funding sources for more efficient tourism promotion.

Under the bill, municipalities will receive a total of EUR 6.9m for tourism development, the ministry also said.

"By having the possibility to increase the tourism tax, municipalities also take on significantly greater obligations regarding tourism development in their communities," the ministry said.

The bill also regulates the profession of tour guides.