25 February 2013

New Eco-Tax on Car Hire in Balearics

Eco taxes are due to hit tourists the Balearics from 1st April 2013. Hire cars will be subject to a tax up to 7.5 euros per day based on CO2 emissions.

In November 2012, the Balearic Government announced four new environmental taxes for the islands. These taxes included charges for out-of town shopping centres, heavy users of water, non-returnable drinking bottles and hire cars.

The taxes are to be implemented from 1st April 2013 and hire cars are expected to attract a charge between €3 and €7.50 per day depending on the CO2 emissions of the vehicle so could add up to £47 per week to car hire costs. The costs would be collected from customers by the car hire company, even if the customer has paid for the full cost of car hire up front.

The move has been heavily criticised by ABTA, with Nikki White head of destinations and sustainability saying:

"We have asked the authorities not only to reconsider their decision but also ensure they don't rush ahead with the tax. Such decisions may offer a short term boost for government coffers, but hasty decisions that don't give travel businesses time to prepare and that take tourists by surprise can have a damaging impact.”

When the Balearics last introduced an eco-tax on accommodation in 2002, they suffered from a fall in tourist numbers from Britain and Germany and the levy was withdrawn in 2003 after a change of government.

So if you are looking to hire a car in Menorca, Mallorca, Ibiza or Formentera bear the potential increases in mind. It could be worth making sure you use a car hire company that makes a specific point about "no hidden charges” or "includes local taxes”, as you may be in a strong position to argue your case and get a refund from the site you book through. Be warned though, many include one-liners in their terms and conditions stating that they reserve the right to pass on any tax increases.

Whatever you do, you don't want to pay for additional insurance to cover car hire excess at the desk. Purchase a policy from the UK's only car hire excess insurance comparison site, annual policies from our site can cost less than some car hire firms charge for a week's insurance.