Estonia Not Planning to Introduce Tourism Tax for Now

Estonia is not planning to introduce a tourism tax for the time being, as experts believe the rental housing market and legislation must be put in order first; otherwise, the tourism market would face unequal conditions.

Next year, the tourism tax in Riga will increase to €2 per night, with a cap of €17.80 for the entire trip. Currently, the Latvian capital has one of the lowest tourism taxes in Europe at €1 per night. In Vilnius, Kaunas, and Palanga, the tax is €2 per night. Unlike its neighbors, Estonia has no tourism tax.

According to statistics, in the first five months of this year, 1,268,947 tourists stayed in Estonian accommodations, a 5.3% increase from the previous year. Ain Kapp, a board member of the Estonian Hotel and Restaurant Association, said that before introducing a tourism tax, the sector needs to be put in order.

“The main problem is that we have apartments rented out for short-term stays, and we don’t know how many such apartments there are. So before thinking about a tourism tax, we need to regulate the short-term rental market, change the legislation, and then discuss the tax. But it’s important to agree immediately where the money will go. If after a couple of years it becomes another state revenue item, that’s wrong,” Kapp said.

Kristjan Järvan, Vice Mayor of Tallinn (Isamaa), stated that the capital will definitely not introduce a tourism tax in the coming years, as its absence remains one of Tallinn’s key competitive advantages over other Baltic cities.

“First, Estonia has already seen many tax increases, and that affects our international competitiveness. Moreover, there is an important fact often forgotten: more foreign tourists stay overnight in Tallinn than in Vilnius, Riga, or Helsinki. One of our key advantages is the absence of a tourism tax. I believe it should be preserved. If, due to the ‘Robin Hood’ system, revenue from personal income tax—the main source of local government income—further decreases for Tallinn, the city could face financial difficulties in a few years. But today we definitely do not plan to introduce a tourism tax,” Järvan said.

Meanwhile, the Mayor of Pärnu, Kristel Voltenberg (electoral alliance “Südamega Pärnule”), sees nothing wrong with a tourism tax. According to her, for example, in some Greek hotels the tax varies by star rating and can reach €15 per day.

“Of course, such a fee is excessive. But one or two euros added to a hotel or other accommodation bill would allow those funds to be used for improvement, transport, and tourism infrastructure—in the interests of all residents and visitors. In my opinion, this is a fully justified measure. However, local governments in Estonia cannot independently introduce such a tax—it is a state prerogative. But I believe it should be discussed at the state level, especially since neighboring countries already use this practice. Although, of course, I understand that talk of new taxes is never popular,” Voltenberg emphasized.