Tourist tax proposal sparks debate in Rovaniemi, Finland

In Finland, the proposal for a tourist tax is facing mixed reactions. While implementating such a tax is common in Southern European destinations to cover costs incurred by tourists, Finland has not yet adopted this system. However, the city of Rovaniemi has expressed interest in testing a domestic tourist tax, which is also mentioned in the Northern Program currently being developed.

Timo Lappi, CEO of the Finnish Hospitality and Restaurant Association, strongly opposes the idea of a tourist tax, citing that the tourism sector, including hotel taxation, is already among the most heavily taxed in the EU. The value-added tax on hotel operations is set to rise to 14% in Finland at the beginning of next year, which is the second highest rate in the EU. Lappi argues that introducing a tourist tax, especially alongside already increased accommodation taxes, is unfeasible.

On the contrary, Rovaniemi’s mayor, Ulla-Kirsikka Vainio, supports the idea, stating that taxation could be a socially responsible method to offset costs incurred by tourism for cities. However, Lappi warns that this could further deepen the divide between hotels and short-term rental services and suggests that the taxation might primarily target hotels, hostels, and campgrounds, making it challenging to levy a tax on private rental apartments.

Vainio believes the funds raised from the tourist tax could enhance tourism-related infrastructure and cover rising healthcare costs associated with an influx of visitors. Both officials hope for national guidance on managing short-term rentals as the debate continues in Rovaniemi.