Baltic, Financial Services, Taxation, Tourism

International Internet Magazine. Baltic States news & analytics Thursday, 18.06.2026, 10:13

Estonian entrepreneurs fear that Tallinn will lose tourists to Riga

Juhan Tere, BC, Tallinn, 12.09.2008.Print version
The Estonian government plan to increase value-added tax (VAT) on accommodation from the current 5% to 18% will affect the entire Estonian tourist industry, and Estonian entrepreneurs fear that Tallinn could lose tourists to Riga, the Baltic Business News Channel reports.

Riga.

Executives of Tallinn's leading hotels said that increased VAT rate would not only reduce the number of tourists and financial results of hotels, but also drive tourists away from the Estonian capital to other nearby cities, for example, Riga.

 

Estonian Association of Hotels and Restaurants EHRL believes that the increase of VAT rate to 18% will seriously undermine attractiveness of Estonia as a tourist destination.

 

"Costs are about to grow, Estonia is becoming more expensive country for tourists, and some small hotels could go bankrupt," Felix Mägus, chairman of EHRL, said.

 

EHRL on Wednesday sent a letter to the parliament and the Cabinet of Ministers, urging them not to increase VAT on accommodation services.

 

EHRL is an umbrella organization for hotels and restaurants in Estonia, it has 85 members altogether.





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