Consultation to be held on controversial tourism tax plans

A CONSULTATION will be held later this year on controversial plans to introduce a tourism tax in Wales.

The Welsh Government has confirmed a consultation on proposals for a local visitor levy will launch in the autumn.

Rebecca Evans, Minister for Finance and Local Government, said a levy would enable destinations in Wales to be enjoyed for generations to come.

Tourism provides a substantial economic contribution to Wales with tourism-related expenditure reaching more than £5bn annually in 2019.

A tourism tax would raise revenue for local authorities enabling them to manage services and infrastructure which makes tourism a success.

The Cooperation Agreement between the Welsh Labour and Plaid Cymru both contain commitments to introduce levies.

Formal consultation on draft legislative proposals for a visitor levy will launch in the autumn, providing a platform for a range of views to be considered.

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, local communities face an undue burden to fund local services and provisions on which tourists rely. From keeping the beaches and pavements clean, through to maintaining local parks, toilets and footpaths – the critical infrastructure that supports tourism should be supported by all those that rely on it.

“The introduction and subsequent use of such a levy would enable destinations in Wales to be enjoyed for generations to come and encourage a more sustainable approach to tourism.

“The levy would be proportionate by design, and powers to raise the levy would be discretionary for local authorities.

“This would enable decisions to be taken locally, according to the needs of our communities. The levy will apply to those paying to stay overnight within a local authority area. Opportunities for wider contributions on the cost impact of other types of visitor activities on local infrastructure will be offered as part of the consultation on the levy.”

Mid and West Wales Plaid Cymru MS, Cefin Campbell, added: “Giving local people the power to introduce a tourism levy will make a difference to communities across the country, many of which attract a significant number of tourists. It will give local people and their representatives more power and resources to invest and deliver in their areas.

“Councils will be able to ask tourists to contribute in a small way to the areas they are visiting and the local services they use.

“This measure will help support a sustainable rather than an extractive tourism sector, which will help bring the greatest benefit to communities and the local economy.

“Such levies – often known as tourism taxes – are commonplace in countries across Europe and beyond. This is about mutual respect between our communities and the visitors they welcome. It is a new policy which is the fruit of a Welsh co-operative spirit.”

The proposals were heavily criticised by the Wales Tourism Alliance when first announced last year.

At the time, Suzy Davies, Chair of the WTA said: “Welsh Government is well aware of the arguments against double taxation; countries with tourism taxes have lower rates of VAT on tourism businesses.

“It also knows the industry’s views on the effect this will have on local businesses and, so, local jobs.

“With the level of public spending implied in the new document, it is hard to see a new tourism tax as anything other than a way of diverting existing funds to other priorities.

“In reality, the proposals could lead to a contraction in the visitor economy in areas of Wales that are most dependent on the tourism sector

“To even contemplate a tourism tax when businesses are rebuilding after the worst of the pandemic is wholly misconceived.

Welsh Conservative Shadow Minister for Culture, Tourism and Sport, Tom Giffard MS, has also criticised the plans, saying: “Our economy is in a very fragile state at the moment and instead of working to get it fired up again, Labour and their nationalist friends in Plaid Cymru are actively seeking to damage it.

“A tourism tax poses grave dangers for Wales. Not only would it be devastating for businesses and our economy, but it would also leave jobs hanging in the balance.

“Labour and Plaid’s priorities are completely skewed. They should be focusing their energy on delivering a strong economic recovery after the pandemic rather than penalising businesses at this critical time.

“It is imperative Labour ministers drop this barmy plan before people’s livelihoods are hit.”