The broad use of tourist taxation can be put down to several reasons:
(i) the magnitude of revenue potential, that could represent more than 10%
of the tax receipts collected by some developed countries, approaching 100%
in certain small tourist economies (McAleer, Shareef, & Da Veiga,2005);
(ii) the low distortionary effects of taxation and the exportability of the fiscal burden,
especially in countries where tourism is an important economic activity;
(iii) the ability to act as a price substitute for the public goods and services consumed by tourists;
and (iv) the corrective role that could be played by these taxes (e.g., environmental pricing)