Lisbon City Council has collected a total of 203.2 million euros between January 2016 and July 2024 as tourist taxes. This amount only reached 40.2 million euros in 2023. The tax per guest for overnight stays is currently two euros for one night.
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However, this rate will increase to four euros starting September 1st, 2024. The CML confirmed this change, following a proposal approved in July by the municipality’s representative bodies.
Tourist Tax Increase Set In September
CML clarified that the tourist tax for arrivals by sea will remain unchanged. The fixed unit value of two euros per passenger (over 13 years old) disembarking from a cruise ship in transit at terminals located in the municipality has been applied since January 2024, with the new regulations taking effect from April 1st.
In Lisbon, the tourist tax was first applied in January 2016. It targeted overnight stays by both national tourists (including Lisbon residents) and foreigners in hotels or local accommodation establishments.
The tax was capped at a maximum of seven nights per guest per stay, with guests under the age of 13 being exempt. Initially set at one euro per night, it increased to two euros in January 2019. This September, the rate will double to four euros.
Steady Growth in Tourist Tax Revenue Despite Pandemic Challenges
The CML data shows that annual revenue from the tourist tax has consistently increased over the nearly nine years since its introduction. When the tax was set at one euro per night, the municipality collected 46.5 million euros in 2015 and 11.4 million euros in 2016.
Moreover, 16.5 million euros in taxes were collected in 2017, followed by 18.6 million euros the next year. In 2019, the tax collected significantly increased to 36.1 million euros. This was because the rate increased to two euros per night.
However, the upward trend in revenue was disrupted by the COVID-19 pandemic in March 2020 and lasted until May 2023. 2021 was the worst year for tax revenue. It only generated 9.9 million euros even lower than the 12.1 million euros in 2020. Even with the pandemic, 2022 saw a significant recovery in tourist taxes.
A tax revenue of 33.1 million euros was generated. 2023 took it a step further. It hit a record in 2023, totaling 40.2 million euros. As of July 31 this year, CML has collected 25.3 million euros from the tourist tax.
This amount includes revenue from cruise passengers starting in January. However, the municipality cannot yet specify the exact amount, as the sea arrival tax is charged by the entities operating the cruise ship terminals.
In total, Lisbon generated revenue of 203.2 million between January 2016 and July this year because of the collection of tourist taxes. When asked about the impact of the increase in the tourist overnight stay rate from September 1st, CML said that
Several indicators point to similar values, or slightly higher, in the flow recorded in 2023 in the number of overnight stays in the city of Lisbon.
Impact of Tourism on Competitiveness and Growth of Lisbon
The Lisbon City Council reinforced that tourism is a distinctive factor in the city’s competitiveness and a driver of economic and social growth under the presidency of Carlos Moedas. It was a driver of economic and social growth. The Council also emphasized that tourism impacts public intervention. They highlighted that.
Tourism has an impact on public intervention to maintain adequate levels of response, dictating the need to define regulatory policies, and/or direct public intervention, to guarantee Lisbon’s sustainability in economic, social and environmental terms, and minimize negative externalities.
The Lisbon City Council emphasized that tourism’s benefits require enhancing urban infrastructure and city operations, particularly when using tourist tax funds. This includes expanding public services in infrastructure, mobility, urban cleaning, public spaces, security, and tourist, cultural, and leisure offerings.
In an effort that should not burden residents, but rather be supported by those who benefit, directly or proportionally, from the goods and services made available by municipal activity, together with the mitigation of negative impacts caused by the tourist dynamics itself, more or less directly.
Specific Investments Funded by Tourist Taxes
The CML shared concrete examples of how this revenue is spent. They said:
Around eight million euros per year are earmarked for partial financing of the reinforcement of urban hygiene and cleaning.
They also highlighted specific investments made with tourist tax funds, such as the Doca da Marinha, Estação Sul-Sueste, Museu Tesouro Real, and Centro Interpretativo da Ponte 25 de Abril.
