Will Funchal’s Tourist Tax Increase?
The city of Funchal is entering a heated debate over how it manages its millions of visitors. The Funchal City Council (CMF) officially started a review of its tourism laws. This move follows the record-breaking success of the island as a travel destination. However, the proposal to potentially increase fees has been met with strong resistance. Local political groups are now calling for a full investigation into how the city spends the money it already collects from travelers.
City Council Reviews €2.00 Fee as New Regulations Approach in March 2026
The current tourism law in Funchal requires guests to pay €2.00 for every night they stay, up to a maximum of seven nights. Children under the age of 12 do not have to pay this fee. Jorge Carvalho, the President of the Funchal City Council, recently approved a process to change these rules. According to reporting by Observador, he suggested that the price per night might go up to match the current needs of the city.
The council is not just looking at hotels. By March 2026, the city plans to release a new plan for local accommodation, often known as short-term rentals. This plan will decide whether the city continues to block new licenses for these properties. Before any changes become law, the council must talk with business leaders and allow the public to share their opinions.
Opposition Group ADN-Madeira Questions Missing Reports on €13 Million in Yearly Revenue
The political party ADN-Madeira has become a lead critic of the new plan. They point out that the city collected approximately €13 million from the tourist tax over the last year. Miguel Pita, a representative for the party, argues that the city has not shown the public where this money went. As detailed in JM Madeira, the party stated, "Until today, there is no public report that details the destination of this fund."
Critics want to know if the millions were used for city repairs, protecting the environment, or just more advertising. They argue that it is not fair to ask tourists for more money when the current budget is not transparent. The party believes this lack of information hurts the trust that local residents and visitors have in the government.
New Proposal Suggests Single €20 Entry Fee to Replace Multiple Smaller Charges
As an alternative to the nightly tax, ADN-Madeira is pushing for a completely different system. They suggest a single €20 fee that every tourist would pay upon arrival at the airport or sea port. The party believes this would be much simpler than the current method.
As reported by DNotícias, they argue that a one-time payment is more honest because travelers know the cost immediately. It would also stop the city from adding hidden costs, such as charging people to walk on trails or visit nature parks. Under this €20 plan, tourists could explore the island’s beaches and mountains freely without feeling like they are being charged at every turn.
Debate Grows Over 2.5% Commission Plan for Local Hotels and Rental Owners
Another controversial part of the city's plan involves giving back 2.5% of the tax revenue to the hotels and rental owners who collect it. The city council says this helps cover the administrative work of the businesses. However, opposition leaders strongly disagree with this idea.
They believe the tax money should only be used to help the city and its people, not to increase the profits of the tourism industry. Instead of giving money back to business owners, the opposition suggests creating an emergency fund. This fund would support tourism workers if the industry faces a future crisis. As the city moves toward a final vote, the focus remains on finding a balance between making money and being honest with the public.
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