This summer, the demand for accommodation is growing here in Latvia, thus the issue of illegal or unregistered supply has become relevant again. Namely, accommodation is offered to holidaymakers not only by those owners of guest houses and campsites who pay taxes fairly, but also by individuals who are ready to dedicate their housing to holidaymakers for profit during the season. This situation creates unfair competition, but no solution has yet been found.
The tourism industry is waiting for a single register of accommodationLinda Zalane
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Looking at the news site of the social network “Facebook” this summer, it can be seen that one after another, both calls for recommendations for holiday homes that can still be booked, and a wide range of different offers are being published. From campsites and guest houses to private homes, both apartments and houses. Holidaymakers are especially looking for holiday homes by the water – lake, sea and river.
Tourism industry experts surveyed by Latvijas Radio admit that there is a problem in the market with the so-called illegal offer, but so far no solution has been found and a unified register of accommodation has not been created.
“Of course, before the crisis, we worked hard enough to make this whole segment up to standard. I’m not just talking about paying taxes, but about all the requirements that give the guest a sense that he is safe when staying and choosing accommodation,” said Latvijas Hotel and President of the Restaurant Association Jānis Pinnis.
With the onset of the crisis, priorities have changed and, for the time being, honest work and the payment of taxes are on the conscience of every player in the industry.
“As far as the crisis affects the industry, we paid more attention to the industry’s rescue tools and less this time insisted that the Ministry of Economy make extra efforts to develop the register. What we already thought should be that all industry players should register and prove their compliance. “It ‘s up to each other to decide whether it will be a market distortion or whether it will be such a demand that the demand is so high that any supply meets the demand, which is quite high,” said Pinnis.
Asnate Ziemele, the head of the Latvian Rural Tourism Association “Lauku ceļotājs”, said that the range of private (and often unregistered) accommodation offers is growing every year and the state does not pay attention to this problem.
“Booking.com recently reacted to this with reverse VAT. Booking.com records this data and sends it to the SRS. Then I have to say that Airbnb does it little or not at all. Some countries in Europe have started these negotiations, “Our country could have done the same, but sometimes it seems better to sleep with legal businesses than with illegal ones, and that ‘s how we get here,” said Ziemele.
She pointed out that the biggest problem is that those working in illegal businesses not only do not pay taxes, but are not inspected by all supervisory authorities, such as the labor inspectorate, the Food and Veterinary Service and others. Pinnis did not deny that there is a problem of the shadow economy in the tourism sector and that it creates unfair competition.
“If you manage to save some taxes. Although income taxes, including labor taxes – maybe pay in part or in part. Of course, this is an unfair competitive advantage, and staff costs can account for 30-40% of revenue, that’s enough. a large proportion, “stressed Pinnis.
He acknowledged that this is a sensitive issue that has not been put anywhere on the shelf and is likely to be on the association’s agenda next year.
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