The EM states that for the first time the “Rimi” Riga marathon is planned to be given the status of an Elite marathon. The event will take place for three days – from May 16 to 18, attracting at least 9,050 participants and visitors from foreign countries, who will spend at least two nights in Latvian tourist accommodation.
By organizing a targeted international marketing campaign, attracting the world’s leading runners in various distances from the mile to the marathon, as well as by obtaining the formal status of the highest level “World Athletics” competition and actively working with international “run influencers”, the “Rimi” Riga Marathon is raised to a higher marathon category, thus creating an additional influx of new tourists and ensuring wider international recognition, explains the EM in the report.
The preliminary costs of the “Rimi” Riga Marathon, based on the information provided by the organizer, are planned to be 2,122,266 euros. Of this amount, 1,495,574 euros will be covered by the organizer, while state co-financing is required in the amount of 626,692 euros.
Co-financing for the organization of the “Rimi” Riga Marathon needs to be granted by January 10, 2025, according to the Ministry of Finance.
Evaluating the compliance of the marathon with the criteria of a major event approved by the Cabinet of Ministers, the EM concludes that it qualifies as a major event.
The organizer predicts that 4,305 foreign participants and 4,746 visitors will attend the event, as data from previous years show that each athlete is accompanied by at least 1.1 fellow riders or supporters. It is assumed that participants and visitors stay at least two nights in Latvian tourist accommodation. Therefore, the number of nights spent by foreign guests in Latvian tourist accommodation is predicted to be at least 18,102.
Based on the methodology described in the Major Events Report, the preliminary turnover generated by foreign guests of the “Rimi” Riga Marathon is planned to be 4,235,868 euros. Accordingly, value added tax (VAT) revenues will provisionally reach at least 650,758 euros, according to the information report of the Ministry of Finance.
According to the Major Events Report, in the medium term, a fiscally neutral major event may be co-financed by the state budget in the amount of up to 90% of the preliminary and actual VAT revenue from turnover generated by foreign visitors. Accordingly, taking into account the previously made estimates, it is possible to allocate 585,683 euros for the marathon, informs the EM.
Exact calculations of VAT revenue from turnover generated by foreign visitors will be included in the next informative report on the allocation of funding for the marathon, based on the audit report submitted by the organizer.
Current forecasts show that the “Rimi” Riga Marathon meets the criteria of a fiscally neutral major event, as all the criteria specified in the Major Events Report are fulfilled. Additional tax revenues are expected both from the remaining 10% of the turnover generated by foreign guests and the visit of local guests, as well as from other tax payments – personal income tax, mandatory state social insurance contributions, corporate income tax. An additional benefit is increasing the international recognition of Latvia’s image, explains the EM.
Also, the EM report states that the organization of specific niche projects or events in Latvia ensures the spending of the relevant local audience in Latvia, and not the outflow to other countries if the event were organized elsewhere.
The EM informs that in 2023 both events together – the World Running Championship and the “Rimi” Riga Marathon, based on the economic impact study conducted by the organizer, ensured an economic impact of up to 11.8 million euros, i.e. the collected funds (spending) from all participants and visitors. Total tax revenues for the state amounted to EUR 2.078 million, of which VAT revenues amounted to EUR 1.724 million.
2024-08-15 10:30:45