Why is the Spanish government ignoring the importance of the MICE segment (by Luis Díaz)?

The Spanish government is working hard to implement measures that, sooner or later, will destroy one of the few sectors that until now have managed to survive with dignity, because it is somewhat competitive and very active.

 

The President, the Ministers of Finance and Tourism, the Director General of Taxes, the Secretary of State for Finance, the Secretary of State for Tourism…, they all know perfectly well that the new tax measures affecting agencies specializing in the organization of meetings, incentives and corporate events, especially the VAT, will lead 

to the closure of many of them due to lack of viability; inevitably to the closing of many of them due to lack of viability, since, after paying the social security, income tax and VAT, there is practically nothing left to pay the general expenses, the costs of participation in fairs and workshops, nor the promotional expenses, nor the salaries paid to the employees.

The popular parliamentary group, when it was in the opposition, was aware of this barbarity, and took parliamentary initiatives to modify the situation, presenting a project in parliament to solve the VAT issue. It was not approved by the opposition of the other parliamentary groups, who also knew perfectly well what they were doing.

Now that they are government and with parliamentary majority, they do all the opposite to what they promised, increasing the VAT on the gross margin of the agencies from 16% to 21% and maintaining the discriminatory difference with respect to the reduced VAT with which are taxed the elements that normally constitute the services they sell, such as accommodation or transport. ?Is not this lack of consistency?

To increase 5 points a tax that, as established by the REAV (Régimen Especial de Agencias de Viajes), is calculated on the gross margin, instead of equating it to the reduced VAT, as claimed by the sector, is an outrage that must be changed quickly, if they do not also want to load this sector. Then it will be too late, and we must not forget that agencies specializing in the MICE segment, have been the main promoters of Spanish tourist destinations in that segment of tourism.

There are other issues that are also truly disconcerting. For example, the increase in the VAT applicable to the congress registration fees, which has risen from 8% to 21%. As everyone in the business knows, this is a determining factor in the choice of venues of international congresses. With whom are we going to fill from now on the multitude of conference centers that our city councils have been building in recent years? Let us hope that our authorities have already designed a plan to find new activities for them and let us hope that they do not put them in competition with the already existing “Casas de la Cultura”.

And let us not mention the change in the VAT of the golf courses, which have gone from 8% to 21%. It would be a serious mistake if this decision were based on golf being considered a luxury activity, since thanks to this sport, Spain, and especially some areas such as the Costa del Sol, is chosen as a destination by many companies for their conventions and incentive programs, which not only generates profits but also creates jobs;This not only generates benefits and creates jobs for the golf clubs, but also benefits the hotel and catering sector, commerce and services in general, which, without any doubt, will be seriously affected by this VAT change, making them unviable in many cases. Unfortunately, we are already seeing the negative repercussions, and September has only just begun.

That is why most of us who work in the MICE segment in our country are asking ourselves why the Spanish government insists on continuing to ignore the importance of the meetings, incentives and events segment for our tourism?

LUIS DÍAZ
Executive Director of the ASOCIACIÓN ESPAÑOLA DE DMC (SpainDMCs)