Funding approved for research as Wales tourism tax on agenda
THE Welsh Government has now commissioned research projects into a potential tourism tax for Wales.
Labour and Plaid Cymru are pressing on with a consultation on the proposal to allow individual local authorities to introduce a levy on visitors. These are most commonly imposed on nights spent in hotels, B&Bs or self-catered holiday lets.
They have come under fire from the sector and Welsh Conservatives for the move to add taxes to the sector, particularly as it follows the pandemic and given the current cost-of-living crisis that is affecting households and businesses. They say it will damage the sector and lead to job losses.
Ashford Price, a stalwart of the Welsh Association of Visitor Attractions (WAVA), claimed the country’s planned tourism charge reflected an “anti-English” agenda despite the fact other tourism areas around the world where these taxes are in place; and
■ analysis of the demographics of the proposed charge would apply to the accommodation sector in Wales. any overnight visitor, regardless of North Wales Tourism chief execuwhat country they came from. The tive Jim Jones has said he found it industry brings a substantial eco“staggering” that the Welsh Governnomic contribution to Wales, with ment is still talking about a tourism tourism-related expenditure reachingtax. more than £5bn annually in 2019, but He said: “A tax on tourism would be also puts pressure on the infrastruca hugely regressive step that would ture of local communities. damage an industry that is already
The Welsh Government has been reeling after the pandemic.” asked to produce evidence to support Chairman of Wales Tourism Allithe move ahead of a consultation this ance Suzy Davies has said that a tourautumn. Now Minister for Finance ism tax would not help in creating a and Local Government Rebecca “welcome to Wales” message that will Evans has approved funding for three attract tourists to the country. research projects to support the “All tourism-tax countries have development of the tourism levy. much lower rates of VAT for tourism
They will look at: products in those countries,” she said.
■ research into the economic “But the prospect of a 20% VAT rate impacts of a tourism tax in Wales. plus the tourism tax, however mod
■ overview of the tax systems in est, is not great news for tourism in
GB, let alone Wales.
“And again, it does not help us with that ‘Wales really wants you, welcome to Wales’ message that we need to be pushing at the moment.”
Rebecca Evans, Minister for Finance and Local Government, said: “Visitor levies are a common feature in tourist destinations internationally. They are an opportunity for visitors to make an investment in local infrastructure and services, which in turn make tourism a success. Without such a levy, communities face an undue burden to fund services and provisions on which tourists rely.”
Mark Drakeford, Wales’ First Minister, believes a tourism tax can help ease the burden on rate-payers, who he claims currently underwrite many of the services and facilities that visitors enjoy, from car parks to toilets.
But tourism operators point out that visitors already bring in additional money for local areas. This ranges from extra business rates from tourism-related firms to council tax premiums on second homes. There is also the Enhanced Population Grant, which allocates extra money from Welsh Government based on the number of visitors to a county. In addition, visitors also pay to use car parks and sometimes toilet facilities – directly helping to fund them.
On the research projects, a Welsh Government spokesman said: “The three projects include secondary research on the economic impacts of a tourism levy in Wales; an overview of the tax systems facing the visitor economy in selected countries; and an analysis of the demographics of the accommodation sector in Wales.
“The research will further build the evidence base to inform policy-making and ensure any levy brings maximum benefits for communities.”