The effectiveness and transparency of the eco-tax has been called into question once again, this time with a forceful warning from the Canary Islands hotel industry. The owner of the former Tamarindos Hotel in San Agustín, Gran Canaria, has denounced what he calls a "big scam," joining the criticism of figures such as Gabriel Escarrer, president of Sol Meliá, who has publicly criticized the management of these revenues. The controversy has intensified following a recent report from the Audit Office of the Balearic Islands, which appears to confirm the worst suspicions about the destination of millions of euros collected.
The numbers reveal a management that, to say the least, raises questions. Since its creation in 2017 by Francina Armengol's government, the "sustainable tourism tax" has accumulated nearly €700 million through 2023. Of this hefty figure, and excluding the €218 million allocated to cover needs during the pandemic between 2020 and 2022, the Audit Office has revealed that, of the remaining €480 million, only €59 million worth of projects have been implemented. This represents barely 12,3% of the funds raised and not diverted to the health emergency.
The report from the Balearic Islands' tax authority not only exposes this poor implementation but also warns of "serious problems and failures in the management of the tax," even making it impossible to verify whether the reported amounts have been invested in the manner and amount promised until December 31, 2023. This situation raises serious questions: What has been the purpose of the money that hoteliers, at risk of fines, have rigorously collected from their clients, justifying that it would be used to improve the islands' environmental situation? The sector's concern centers on whether they have been made "unwitting participants in a deception."
From the hotel industry's perspective, the eco-tax has not proven to be an effective measure to discourage demand, especially during peak season. Furthermore, and more worryingly for the industry, it has not fulfilled its objective of being a "targeted" tax; that is, it has not been possible to prove that the money is directly invested in improving the quality and sustainability of the tourism or economic model. Instead, in their view, the tax has only achieved two negative effects: reducing competitiveness by making the Balearic tourism product more expensive compared to other destinations without similar taxes, and taking money out of the pockets of tourists who would otherwise have been able to spend it on local commerce, culture, or leisure activities, generating a greater multiplier impact on the economy.
Until now, criticism of the eco-tax has been "politically incorrect." However, the mismanagement denounced by the Audit Office opens the door for "honest reflection." The sector demands that, if the tax is maintained, its management shift from its current inefficiency to one that is "clean, transparent, efficient, and impeccable," ensuring that the funds are truly used for the purposes for which they were conceived.
