While tourists in Riga have so far had to pay €1 for every night spent in the city, this will rise to €2 next year. In Vilnius, Palanga and Kaunas, a charge of €2 per night has already been in place for some time. Discussions on a tourist tax are also under way in Finland.

The issue has been discussed for several years in Estonia, but no decision has been made.

Veikko Luhalaid, executive director of the Association of Estonian Cities and Municipalities, said local authorities, particularly in regions that are tourist hotspots, back the idea, but have questions about the conditions.

"The ideal scenario for us would be for it to be a local tax and for it to be a right, not an obligation. The right would be granted by law, and a region that sees a benefit from it could, as a local authority, impose the tax itself. And what is good about this tax – it is a little unfortunate that it has been discussed for so long but has not been implemented – is that it does not affect the local authority's own residents, meaning it does not burden locals but is paid by tourists," Luhalaid said.

Mayor of Pärnu Kristel Voltenberg said the issue could be discussed at the national level.

"I would strongly support it, because I assume that the consumer, the visitor, is smart and understands that the small additional fee they pay for their overnight stay – they use the urban space in the same way and sometimes even more intensively. They want to feel good there; they want the flowers to be blooming; they want there to be enough rubbish bins and for those bins to be emptied. They also make their contribution so that the destination they visit serves them as well, and why should it do so for free?" Voltenberg said.

But Deputy Mayor of Tallinn Kristjan Järvan takes a different view.

"Imposing a tax does not make things better, but rather the opposite – it makes coming here more expensive for tourists. The question is how much, and whether, additional investment should be made to bring tourists here. If we look at the statistics, accommodation establishments in Tallinn are comparatively close to their capacity in terms of occupancy during the summer. It is rather the low season where there is a problem, but introducing a tourist tax would certainly not provide any support," he said.

Information gap

The Estonian Hotel and Restaurant Association wants a register of short-term rental apartments to be created before introducing a tourist tax so that hotels are not placed at a disadvantage.

Ain Käpp, association board member, said that a big information gap first needs to be filled.

"Today, the state and local authorities lack information about short-term rental apartments. So it would be very unfair to collect a tourist tax from hotels while other market participants, of which there are already very many today – allegedly, in Tallinn, for example, enough rooms to fill nine Viru hotels – are something we know very little about," he said.

"First, a register should be created for short-term rental apartments so that local authorities have information about how many apartments there are, and then we could talk about a possible tourist tax and its timing, when it would be most appropriate to introduce it," Käpp said.

Ministry: Not on the agenda

Kristina Jerjomina, head of tourism at the Ministry of Economic Affairs and Communications, said that introducing a tourist tax is not currently on the ministry's agenda.

"Tax policy decisions are made at the Ministry of Finance, while issues concerning local taxes also require the involvement of the Ministry of Regional Affairs and Agriculture, as local authorities cannot impose taxes themselves without legislative amendments," she said.

At the same time, Jerjomina noted that a tourist tax could have several benefits. These include providing local authorities with additional revenue to develop infrastructure and visitor attractions, marketing the region and helping cover additional costs arising from tourism.

"At the same time, its actual benefit largely depends on how the revenue collected is used and whether it is channelled back into developing tourism in the region," she said.

If a tourist tax is discussed in the future, it must be approached from a comprehensive perspective, Jerjomina said.

"The impact on the competitiveness of the tourism sector, the administrative burden on businesses and visitor numbers must be assessed. Consideration must also be given to how the revenue collected is channelled back into the development of tourism and the local living environment," she said.

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