CiU and PP agree on postponing the tourist tax and limiting the drug prescription fee

Barcelona (ACN).- After weeks of negotiation, the Centre-Right Catalan Nationalist Coalition ‘Convergència i Unió’ (CiU) –which runs the Catalan Government- and the Conservative People’s Party (PP) are very close to reaching a final agreement on the Catalan budget for 2012. CiU does not have the absolute majority in the Catalan Parliament and needs the votes or, at least the abstention, of another group. CiU has started to talk with other parties but three weeks ago it was quite clear that the 2012 budget would be agreed with the PP, as was the case in 2011. However there were two main obstacles, two of CiU’s main proposals to increase revenue and balance the public health spending. On Tuesday both parties confirmed that they have agreed on those two issues: the new tourist tax would be postponed until November 2012, it would reduce the number of obligatory-payment nights and would include different rates for Barcelona city. Furthermore, citizens with lower incomes will not have to pay the drug prescription fee, which will also reduce the number of obligatory-payment prescriptions. However, both measures would have brought additional revenue, and thus the budget proposal will have to be modified to further reduce spending or to increase revenue with other measures. On Tuesday, the Catalan Government Spokesperson, Francesc Homs, did not want to speculate on these changes, but confirmed that if spending were to be further reduced, it would not affect public health, education and social services, but instead other departments would be affected.

CiU and the PP have agreed to modify the Catalan Government’s original proposal on a new tourist tax and a new drug prescription fee, in order to approve this year’s budget.

The original proposal

The original proposal for a drug prescription fee planned on charging each citizen a €1 fee for each medical prescription with a maximum amount of €61 per year in order to avoid harming chronically ill patients. The Catalan Finance Ministry expected to collect €100 million with the measure this 2012. Nonetheless, when presented, the Catalan Health Minister, Boi Ruiz, insisted that the measure was mainly aiming at limiting the demand for drugs, and thus reducing the pharmaceutical bill paid by the public health system.

The tourist tax foresaw a fixed price per hotel night with the fee depending on the hotel rating. Furthermore, after the tenth night, no fees would be paid. People staying in three-star hotels or lower (including hostels) would have to pay €1 per night; those staying in a four-star hotel, €2; and, those staying in a five-star hotel or on a cruise ship, €3 per night. Furthermore, people participating in social programmes and children up to the age of 12 would not have to pay any fees. The measure was also supposed to bring in €100 million in revenue for the Catalan Government’s 2012 budget.

Controversy over the tourist tax

The hosting industry complained about the Government’s new initiative, stating it would harm the business, reducing Catalonia’s competitiveness as the tax would have to be reflected on the final price or be taken away from the industry profits. The Catalan Government was open for negotiation with the industry, and clarified that campsites and holiday cottages would be excluded from the tax.

The modified proposals

After negotiations with the PP, but also with the tourism industry and health stakeholders, the Catalan Government is willing to modify its original proposal on the two new fees. The tourist tax will not come into effect until at least November 1^st 2012, leaving all the upcoming summer season without the tax. Furthermore, the PP confirmed that the number of nights the fee would be charged has been reduced, dropping from 10 to 7. Therefore, visitors will only have to pay for the first 7 nights, and from the 8^th night, no fees will be charged. In addition, if they come as a group, only two individuals will be charged, the rest will be excluded. However, this last aspect would still be under discussion. Finally, all the fees have been reduced regarding the original proposal and Barcelona will have a different rate from the rest of Catalonia, according to the PP. With the new proposal, people staying in five-star hotels and cruise ship would pay €2.50 per night. Those staying in four-star hotels in Barcelona would pay €1.25 and in the rest of Catalonia €1 per night. The remaining hotel categories will charge 75 cent per night in Barcelona and 50 cent in the rest of Catalonia. Neither children and teenagers up to age of 16 nor people participating in social programmes will have to pay the tax.

Regarding the drug prescription fee, people receiving a non-contributory pension and those receiving the so-called ‘insertion minimum income’ (RMI) would be excluded from paying the fee. This is to say that people with the lowest incomes will not have to pay the €1 for each drug prescription. CiU and the PP are still negotiating the final details, but the PP is requesting the measure not to affect drug prices below €1.67. The PP would agree that patients do not have to pay beyond the 62^nd prescription per year, to avoid harming chronic patients. This last point is very similar to the original proposal, when the Health Department proposed a maximum of €61 per patient/year. The difference would be now that the limitation is not in the amount of money paid but in the number of prescriptions per year that have the €1 fee charged.