characterized by convoluted and inconsistent regulations, as well as significant environmental consequences, exemplified by the recent phenomenon of overtourism. In this context, Italy has seen some positive outcomes, but numerous existing fragilities still characterize the regulatory system, particularly from a macroeconomic and tax perspective7. This highlights a clear problem in balancing demand and supply, as well as in the management, protection, and enhancement of the tourism sector. A sustainable approach to tourism requires policies that encourage responsible resource use, minimize environmental impact, and ensure that local communities benefit from tourism through fiscal measures. This supports a development model that balances economic growth with the protection of both the environment and fundamental human rights. II. THE SHADOWS: THE ROLE OF THE TOURIST TAX IN THE EVOLUTION OF THE TOURISM SECTOR’S DEVELOPMENT One of the fiscal tools introduced in the tax system to support tourism initiatives is the tourist tax: a fairly common form of taxation both in European and non-European countries. In most countries, including Italy8, this is a local tax imposed on individuals staying in accommodation facilities located in areas classified as tourist destinations or cities of art and it’s intended to provide local governments with additional resources to improve infrastructure and services for travelers. However, its application in the international current tourism framework has some limitations, in fact, it tends to place a heavier burden on already popular destinations, rather than addressing the needs of less-visited areas that could benefit from increased tourism investment. This aspect is particularly evident in Italy where the tax is applied inconsistently across different regions, creating geographical disparities. Moreover, the money collected is not always reinvested in tourism, which 7 The Italian tourism industry is already largely in foreign hands, leading to an annual loss of at least €2 billion in tax revenue. Most Italian hotels are affiliated with foreign companies that dominate the market and in 2023, the hotel sector generated €30.5 billion in revenue, of which €18.3 billion came from foreign-affiliated properties, with fees paid to the foreign affiliates amounting to at least €2.7 billion (15% of turnover). These fees are primarily taxed abroad, resulting in a tax revenue loss estimated at a minimum of €1 billion annually. 8 https://www.ministeroturismo.gov.it/wp-content/uploads/2023/02/Imposta-di-soggiorno-e-flussi-turistici_final_compress.pdf. 119 TOURISM AND FISCAL LEVERAGE
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