Funchal City Council has approved a proposal to double the tourist tax per overnight stay, from 2 to 4 euros, with the measure expected to take effect in January.
The decision, currently under public discussion, has drawn criticism from the PTP party, which argues the increase could harm the destination's competitiveness and affect demand in sectors like hotels, restaurants, and commerce.
Studies suggest tourist tax impacts on demand are often marginal, but negative effects can occur in island destinations. However, simulations for the Canary Islands with similar proposed rates for Funchal indicated a potential demand reduction of less than 5%.
