Tourism: the real issues, the dubious numbers and the open secrets on Tax Free Shopping
The Tax Free Shopping case in Italy. The speech by Arturo Aletti, former CEO of the GlobalBlue Italia company from 1989 to 1998
Dear director,
I followed part of the speeches at the event organized by the minister of Daniela Santanché on Lake Maggiore called the International Tourism Forum and I asked myself: but how much is tourism worth?
My impression is that public decision makers have no idea and just throw around numbers that are provided to them from time to time by stakeholders, who they consider as exclusive bearers of expertise.
I take for example a sector that I know quite well: the tax-free shopping that non-EU resident tourists do in our country with the right/incentive to the VAT "discount" (in the form of immediate relief at the point of sale or refund): in the report which accompanies the change in the minimum purchase limit provided for in the budget law, it is stated that in 2019 TaxFree shopping by tourists in shops in Italy was worth 3.1 billion euros.
However, in the Customs Blue Book presented in September 2020, relating to the 2019 activity, we read that the digital invoices stamped leaving Italy were 5.4 million: now, since each of these invoices had a value close to €1000 and since to the invoices seen leaving Italy must be added the TaxFree invoices seen leaving the EU from the other customs of other EU countries, where tourists passed before returning to their countries, it seems to me that Tax Free Shopping in Italy, in 2019 alone , was worth more, much more than 3.1 billion.
If I then go and review the slides that the main TaxFree refund intermediary presented at the Altagamma Conference (in front of the managers of the most important Luxury/Fashion brands, who know very well how much and to whom their stores sell) I notice that the value of TaxFreeShopping Tourists in Italy were estimated at 7 billion in 2015 and it has certainly not decreased over the years, on the contrary!
So what's this story like?
I have a suspicion: those who benefit from certain results, if not forced by competent interlocutors, deflate the numbers, when they can, so as not to have to do the math in their pockets.
In fact, both the main intermediary of TaxFree refunds and the luxury/fashion brands that receive large refunds from the intermediary admitted to operate in their stores have no interest in "waking the sleeping dog".
The thing to wake up would be a competent and intelligent government, which understood that if it gives up collecting VAT on 7/8/9 billion of shopping every year, but tourists are reimbursed a third less, someone will put a lot of money in their pocket, which instead are intended for tourists.
Therefore the same government, if it really wanted to attract tourists in a competitive way, could decide that TaxFree refunds in Italy (and before that in other competing countries) must be equal to the VAT due and no less, communicating to the whole world that Italy becomes the most convenient destination to come and do, among other things, tax-free shopping.
And yet nothing! We have to listen to the insipid proclamations of public decision-makers and read article after article that reproduces veils from their press offices, where, more often than not, the real values at stake disappear.
The effect of this situation is, for example, that at the end of the Tourism Forum the minister proudly announces that in the Pnrr review she managed to bring out 300 million more for the competitiveness of tourism, but she doesn't notice (or pretends not to) know) that there are 500 million more to be put every year in the pockets of tourists to be attracted for tax-free shopping in Italy, at zero cost to public finances, as I explained before.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/turismo-numeri-segreti-tax-free-shopping/ on Mon, 27 Nov 2023 09:23:04 +0000.