The Portuguese government has announced that value added tax (VAT) on fitness operations will rise from 6 to 23 per cent.

Starting this month (November 2010), the increase will bring fitness in line with the standard level of VAT, which is also set to rise by 2 per cent to 23 per cent.

"This 17-point increase is likely to have a devastating impact on every segment of the market, which is already under tremendous pressure due to the weakening economy and rising unemployment," said former CEO of Holmes Place Iberia Nick Coutts.

"A 17 per cent reduction in net revenue simply can't be accommodated by the vast majority of operators. Meanwhile a subs rate increase across the board for existing members is all but impossible as, when VAT was cut from 19 to 5 per cent in January 2008, in most cases this was not passed on to members."