We study the implementation of the tourist tax in Italian municipalities, highlighting the link between its reach and the inbound tourist flows. The reference period is the year 2016. After carefully examining all the regional regulations, we were able to identify the municipalities entitled to introduce the tourist tax and those that actually introduced it. The revenues generated and the decision to introduce the tourist tax or not are then analysed in correlation with local tourist attractions, other fiscal resources and the size of the municipalities.
Municipalities with the tourist tax in 2016 account for only one ninth of all Italian municipalities and one sixth of those eligible to do so, but they attract 70 per cent of inbound tourists. Revenues are on average about 4 per cent of those arising from autonomous taxation (around € 20 per resident). Rome, Milan, Florence and Venice head the municipalities in terms of revenues. In fact, although these four towns only account for 7 per cent of total nights spent by tourists in Italy, their revenue share is over 50 per cent. A simple econometric estimation shows that the probability of introducing a tourist tax in a municipality is highly correlated to the tourist attractions of the local area and to the same tax being applied in the neighbouring municipalities, suggesting possible strategic interaction between them.
