welsh labour tourism tax

Welsh Government announces when tourists will have to pay a tax to stay in Wales

A public consultation found that the majority of respondents agreed that tourists should contribute towards the costs of maintaining and investing in the destinations they stay in

• 12:40, 30 MAR 2023
• Updated 14:29, 30 MAR 2023

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Plans for a new tourism tax in Wales are moving forward, the Welsh Government has confirmed. Legislation enabling local authorities to introduce a visitor levy in their areas will be put to the Senedd within this government term which ends in 2026.

It comes after a public consultation, which ended in December of last year, found that a majority of respondents, which stood at 58%, agreed that tourists should contribute towards the costs of maintaining and investing in the destinations they stay in. The findings of the consultation, which were published on Thursday, found that support for a levy was strongest in areas that attract the most tourists, with two thirds of people in Wales who reported that they live in areas that had a lot of tourism back the introduction of a visitor levy.

The controversial levy will be a small charge paid by people staying in commercially-let overnight visitor accommodation, the Welsh Government has said. Similar charges are commonplace around the world, used in more than 40 destinations including Greece, Frankfurt, Amsterdam and Catalonia - although tourism groups say they all have far lower VAT rates for their tourism sectors.

To view this poll in a separate window, click here.

Under the new plan, local authorities will decide whether to introduce a levy and the funds raised will be used to benefit local areas. Over recent months, the plan has found support across most local authorities and across other organisations, but many responses also came from representatives of the tourism industry, with many disagreeing with the principle of a visitor levy . The Welsh Conservatives have also expressed strong opposition to the scheme.

Rebecca Evans, Minister for Finance and Local Government said: "As the Easter break approaches and many parts of Wales prepare to welcome visitors from around the world, it’s more important than ever that we look to create a sustainable tourism sector that also supports local communities. Over the coming years, we will continue to work with businesses, local government and all our partners to design a levy that will put power into the hands of local communities." For the latest news on Welsh politics sign up to the Wales Matters newsletter here

She added: "We understand some businesses have reservations about a visitor levy and I am grateful to all those who took the time to respond to our consultation. These responses will be carefully considered as we continue to develop our specific plans for a levy. Many destinations around the world use visitor levies to empower and enhance their local areas for the benefit of visitors and locals alike – I am confident this will be the case here in Wales."

Proposals for a visitor levy have been progressed through Welsh Government’s Co-operation agreement with Plaid Cymru. Plaid Cymru Designated Member Cefin Campbell said: "We want Wales to have a thriving, sustainable tourism sector and the visitor levy will play a part in achieving this. Our aim is to develop responsible tourism that works both for visitors and for the communities they are visiting. Local authorities will be able to introduce a small contribution from visitors enjoying their area to help develop and protect local services and infrastructure."

But Welsh Conservative Shadow Minister for Tourism, Tom Giffard MS, said: "Nothing says welcome to Wales more than Labour announcing they will be pressing ahead with their toxic tourism tax as families gear up for the Easter holidays. As ever the devil is in the detail with these consultations and we know that it is unlikely the proceeds would be used to improve local tourism economies, in fact Adam Price said it would be used for other vanity projects, so it's highly likely our local communities won't see any benefit.

"Tourism supports 1 in 7 jobs in Wales enabling people to pay council tax, helping to tackle the issues that Labour claim a tourism tax would fix. The Labour Government should be working with the industry to boost this vital sector instead of taking a sledgehammer to crack a nut."

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Wales tourists could pay extra fee for overnight stays as Welsh government pushes ahead with tourism tax plans

The plans would need approval by the Senedd but the Welsh Conservatives have compared plans to introduce a levy to "taking a sledgehammer to crack a nut".

Wales reporter @TomosGruffydd

Thursday 30 March 2023 12:09, UK

Visitors to Wales could be paying an additional fee for staying overnight amid plans to introduce a tourism tax in the country.

The Welsh government says it is moving ahead with plans to introduce a "visitor levy" in Wales .

Local authorities will have powers to introduce a levy in their areas, the money would then be spent on maintaining the local area.

Plans will need to be rubber-stamped by the Senedd before they are introduced but they are likely to get passed it's one of the policies included in the co-operation deal between the Labour government and Plaid Cymru which was agreed after the last Senedd election in 2021.

The Welsh government says the charge will be "small" at commercially-let overnight visitor accommodation.

The Welsh Conservatives, the largest opposition party in the Senedd, has accused the government of "taking a sledgehammer to crack a nut".

A similar scheme is already in place in more than 40 destinations across the world including Greece, Frankfurt in Germany, and Amsterdam in the Netherlands, the Welsh government argues.

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A consultation received over 1,000 responses and the government says there was support across most local authorities and other organisations.

Responses also came from tourism industry representatives and many disagreed with the principle of introducing a fee.

The Welsh government's consumer research found that 58% of respondents thought tourists should pay towards the upkeep and investment in their local area.

It also found that support for tourism tax was highest in areas which attracted the most tourists.

'Sledgehammer to crack a nut'

Finance and local government minister Rebecca Evans said: "We understand some businesses have reservations about a visitor levy and I am grateful to all those who took the time to respond to our consultation.

"These responses will be carefully considered as we continue to develop our specific plans for a levy.

"Many destinations around the world use visitor levies to empower and enhance their local areas for the benefit of visitors and locals alike - I am confident this will be the case here in Wales."

Read more: Welsh council closes road for £6,500 clean-up after drivers throw rubbish Man guilty of murdering woman who mistook his home for B&B in North Wales

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The Welsh Conservatives' shadow tourism minister, Tom Giffard, voiced the party's opposition to the plans.

"Nothing says welcome to Wales more than Labour announcing they will be pressing ahead with their toxic tourism tax as families gear up for the Easter holidays," he said.

"Tourism supports one in seven jobs in Wales enabling people to pay council tax, helping to tackle the issues that Labour claim a tourism tax would fix.

"The Labour government should be working with the industry to boost this vital sector instead of taking a sledgehammer to crack a nut."

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A visitor levy for Wales

We are working on proposals that will give local authorities powers to introduce a visitor levy.

• Government finance (Sub-topic) and
• Tourism and major events (Sub-topic)

Introduction

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We are working on proposals that will give local authorities powers to introduce a visitor levy. The money raised would support sustainable tourism, helping our communities and preserving the beauty of Wales for future generations.

Introducing a visitor levy is a Welsh Government Programme for Government commitment . The work is being carried out in collaboration with Plaid Cymru and is part of the Co-operation Agreement .

The proposals would require new legislation if taken forward. Policy development to legislation and implementation is a process that takes time. Measures are unlikely to come into force for several years, if approved by the Senedd. The visitor levy would represent a small amount of a visitor’s overall spend. Decisions on the rate of a levy in Wales will need to be approved by the Senedd as part of the legislative process.

Each local authority in Wales will have the power to decide if they want to introduce a visitor levy in their area.

Introducing a visitor levy in Wales has been under consideration for many years. The idea was suggested by the people of Wales as a potential area for revenue raising following a public call for ideas in 2017.

Following a debate in the Senedd on 4 July 2017, a Call for Ideas for new taxes was issued by the Finance Minister via a WG press notice .

We received over 35 letters and over 270 comments on social media. A tourism tax was one of the taxes put forward by members of the public for our consideration.

The timeline of events is as follows:

• The Wales Act 2014 gave the then National Assembly for Wales powers to introduce new, devolved taxes in Wales.
• The Bevan Foundation Tax for Good report released in 2016 contains suggestions for 8 new Welsh taxes, one of which was the visitor levy. 
• The Cabinet Secretary for Finance (then Mark Drakeford) led a debate in the Assembly to start a conversation about the opportunities new taxes might provide for Wales.
• He then issued a public call for ideas for potential new taxes for Wales.
• Over 300 responses were submitted from members of the public via letter and on social media.

The Welsh Government engaged with stakeholders through the Ministerial Tax Advisory Group and official-level Tax Forum to gauge the views of representative bodies and experts before a shortlist was drawn up of 4 potential new taxes for Wales and announced in 2018. They were:

• a social care tax
• a vacant land tax
• a disposable plastics tax
• a tourism tax

In its Tax Policy Work-plan, the Welsh Government announced it would consider ways in which local authorities could be given permissive powers to develop and implement a tourism tax.

2020 to present day

• A public call for evidence was due to follow in 2020 but was paused due to the pandemic.
• Work on proposals for a visitor levy restarted in autumn 2021 as a Programme for Government Commitment and subsequently part of the Co-operation Agreement
• The public consultation was held from September-December 2022 and included in-person engagement events across Wales and one online.
• In March 2023, the Minister for Finance and Local Government, Rebecca Evans MS announced the intention to move forward with plans to develop visitor levy legislation.
• Draft legislation will be introduced to the Senedd for scrutiny in autumn 2024.

For more information on the indicative timeline in the legislation process, see below.

We are committed to introducing legislation to enable local authorities to raise a visitor levy.

A visitor levy would follow the Welsh Government’s tax principles :

• to raise revenue to fund public services as fairly as possible
• deliver Welsh Government policy objectives, in particular supporting jobs and growth
• be clear, stable and simple
• be developed through collaboration and involvement
• contribute directly to the Well Being of Future Generations Act goal of creating a more equal Wales

The proposals

We propose that a visitor levy will be a small additional charge to be levied on visitors staying overnight in visitor accommodation.

Any final decisions on how the levy will be applied will be taken following extensive scrutiny and a vote in the Senedd.

We believe it is fair and reasonable to ask visitors to make a contribution towards the wider costs of tourism. Our intention is to foster a sense of shared responsibility between residents and visitors, to protect, and invest in, local areas. Where a levy is used in Wales it should encourage a more sustainable approach to tourism.

We know that tourism plays a vital role in supporting local economies. But unbalanced, poorly supported tourism can also put pressure on local communities and undermine the visitor experience.

A visitor levy is not intended to put people off visiting Wales. Instead, we propose that it would be a small contribution by overnight visitors that will generate additional revenue for local authorities to reinvest in local communities. This would enable them to address some of the costs associated with tourism and encourage a more sustainable approach.

The purpose of the levy is to raise additional revenue for local authorities to reinvest in the public services and infrastructure that make tourism a success. Parts of Wales experience high numbers of seasonal visitors. Visitors make extensive use of public goods and infrastructure such as roads. A visitor levy would help fund localised costs from hosting visitors and enable additional public investment in tourism related infrastructure.

Tourism provides a substantial economic contribution to Wales. Tourism-related expenditure was more than £5 billion in 2019. We want to continue to see a thriving tourism industry in Wales and a strong recovery from the impact of COVID-19.

Use of a visitor levy supports the goal of ‘sustainable tourism’ as defined by the United Nations World Tourism Organisation:

Tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities.

Sustainable development on UNWTO

Investing in sustainable local communities

A levy will encourage the preservation and celebration of local communities.

Visitors from within Wales and elsewhere would be making a small contribution to help sustain and improve services. These services are important not only to those visiting, but also residents and businesses alike. We want visitors to know that their contribution will make a difference in supporting the destinations they love and enjoy, caring for and protecting local communities to enable them to continue to thrive.

The critical infrastructure that supports tourism should be supported by all those who rely on it. This includes keeping beaches and pavements clean, as well as maintaining local parks, toilets, and footpaths. Investing and maintaining these enhances the reputation of the destination and supports the visitor economy.

Local authority autonomy

We want to empower local authorities to make their own decisions according to the needs of their communities.

We are fortunate to live in a country that has such a diverse offering for tourists. From the sandy beaches of the Gower Peninsula to misty peaks in Eryri, to vibrant, experience-rich breaks in our cities. We recognise that the size of the visitor economy varies across Wales. Local authorities will be able to choose to raise additional funds through implementing a levy. However, how the levy is applied will be explored in the consultation.

Each local authority will make its own decisions on how the revenues are spent to develop sustainable tourism in their local areas.

Estimates of potential revenue raised by a levy will be provided as part of the impact assessment process.

Policy designed collaboratively in Wales, for the people of Wales

Extensive engagement is essential when developing a new policy.  We have engaged with a wide range of partners to understand and consider differing perspectives. Feedback we have received through the consultation and from engagement with key partners will help shape a proposal that works well across Wales. Discussions were held with local authorities, businesses, third-sector representatives, industry bodies, national parks, the Welsh Revenue Authority, online booking platforms and officials in overseas administrations which have well developed visitor levies.

We are in the early stages of determining the design and scope of a visitor levy. We will continue to engage widely to develop proposals on how a levy should operate in Wales over a number of years.

We recognise concerns raised by our partners and industry representatives about the development of a visitor levy. These include the impact the pandemic and the cost-of-living crisis is having on businesses. We are currently at the start of the process. We will take on board all views and evidence as proposals progress to help inform our decisions.

Impact assessment and research

When developing legislation, we need to set out the impact a levy is likely to have – both positive and negative. A partial regulatory impact assessment will be issued alongside the consultation document, setting out the data we have available to us at this stage.

Provided alongside the partial regulatory impact assessment, is a compendium of data sources on visitor and accommodation numbers for different types of establishments (Serviced, Self-Catering, Camping/Caravan, Hostels). These figures provide some useful context in which to start framing insights into potential revenue generation and implementation costs.

We will continue to assess the potential economic impacts, as well as the broader environmental, social and cultural impacts. We will produce a regulatory impact assessment which will outline the potential impacts of any proposed legislation. This will accompany the draft bill when it is introduced to the Senedd in autumn 2024.

We are developing a robust evidence base to support the design and implementation of the levy. In May 2022, the Minister for Finance and Local Government approved funding for 3 research projects to support the development of the visitor levy. See here for the specifications .

1. An overview of the tax systems facing the visitor economy in selected countries

In our engagement with the tourism industry, businesses have highlighted concerns about the tax burden facing the industry. In particular, concerns have been raised around VAT. VAT rates are set by the UK government. The UK government set the VAT rate back to 20% for the hospitality sector as of 1st April 2022. This is an uplift from the 12.5% rate that had been in place for the sector since October 2021.

We have commissioned research to understand the different tax systems facing the visitor economy in general, and the accommodation sector in particular, in countries with similar economic and tourism characteristics to Wales. This will help us to understand the relative tax burdens facing the tourism industry in other countries, and how the proposed levy would interact with these.

2. Research on elasticities relevant to a visitor levy in Wales

Engagement has also highlighted concerns about how a levy will impact visitor and supplier behaviour. In response to this, we have commissioned a review of the existing research on this topic. The research is examining the evidence on the responsiveness of visitor demand and suppliers to changes in the price of tourism (‘the price elasticities’) and changes in visitor demand to changes in visitors’ income (‘the income elasticity of demand’).

Preliminary findings will be used to inform our understanding of the potential impact of the levy.

3. Analysis of the demographics of the accommodation sector in Wales

We have also commissioned the Office for National Statistic to produce an analysis of the demography of accommodation sector in Wales . The Welsh Government will use the data to inform understanding of the potential impact of the levy, and to support any evaluation activity taken forward.

4. Consumer research

The research was designed to obtain the views of Welsh residents and UK domestic holiday consumers on the potential discretionary visitor levy. It has explored opinions on whether visitors should contribute via a levy, are willing to pay a levy and if they would change their behaviour if a levy was introduced.

More than 2,500 respondents completed the survey; 1,005 lived in Wales. The results reflected broad support for the principle of a visitor levy. The research found that respondents to the survey were more positive than negative when introduced to the concept of a visitor levy in a place where they go on holiday or in their area. 45% were positive, and 25% were negative and positivity increased amongst people with lots of tourism in their area.

Those surveyed broadly supported the principle of a visitor levy. A majority (58%) of respondents agree that tourists should contribute towards the costs of maintaining and investing in the destinations they stay in, rising amongst people with lots of tourism in their area – in Wales (66%) and the UK (72%) with 13% disagreeing.

Visitor levy research: views of consumers and residents

Visitor levies overseas

Visitor levies are common across the world and more tourist destinations are introducing them to help fund the public services and infrastructure that are integral to the visitor experience. 

In Wales, we are designing a levy for local authorities to support sustainable tourism, not to deter visitors.

Visitor levies are used successfully across the world to improve the tourism offer to visitors, including:

• Balearic Islands
• New Zealand

Use of a levy in international examples provides funds that support green spaces, clean streets, visitor facilities, local communities, preservation of monuments, and public transport. These are integral elements to a visitor’s experience.

A commonly implemented version of a visitor levy is a levy on overnight stays in tourism accommodation. There is variation in the design, rates, and application of a tourism levy internationally. In international models the levy ranges from £0.50 to £5.00 per night. It is often charged per person, and tends to vary according to the accommodation type or cost.

There is little evidence to suggest they have a negative economic impact where they are proportionate. There is also limited evidence around displacement effects.

Greece operates a country-wide levy. In Italy, it is applied at a city/town municipality level. Catalonia operates a regional-wide levy.

In recent months, more destinations are seeking to introduce a visitor levy. The Visitor Levy (Scotland) Bill was introduced to the Scottish Parliament in May 2023. If passed, the legislation will give local councils the ability to add a tax to overnight visitor accommodation if they wish to do so.

Manchester introduced a City Visitor Charge on 1 April this year for visitors staying overnight in certain accommodation.

Details of the outcome of the consultation which ended on 13 December 2022 can be found here.

The consultation explored the proposed design of the visitor levy. In December 2022, we commissioned an independent analysis of responses to the consultation in December 2022. This work was undertaken by Alma Economics.

We also published the outcomes of the independent consumer research undertaken by BVA-Bdrc, which explored views among the public about a visitor levy.

The Welsh Revenue Authority (WRA) has conducted user research on behalf of Welsh Ministers to understand how accommodation providers currently operate and inform how a visitor levy would work in practice. Workshops have been held with a number of accommodation providers across Wales.

We will continue to engage with our key partners to understand differing views and inform the design of a levy that will work for everyone in Wales.

As we progress legislative proposals, we will assess the potential economic impacts, as well broader environmental, social and cultural impacts, of implementing a visitor levy in Wales.

We aim to keep the design and implementation of the levy simple and clear, to minimise the administrative burden placed on accommodation providers and local authorities.

The legislative process

A draft bill will be introduced into the Senedd by the end of 2024. The Senedd will scrutinise the draft bill, and may propose amending it as part of their review, before deciding whether or not to endorse it by means of a vote. This will take due time, we  estimate that this decision will be made in 2025.

If the Senedd approves the legislation, it will then be for each local authority to decide if it wishes to start the process to introduce a levy in their area.

A local authority would need to consult with its communities, and undertake its own impact assessments, to inform its decision about implementing a levy.

Once a local authority makes a decision to introduce a levy, there will be a notice period to ensure businesses and visitors are prepared.

Through the above process, we estimate that the earliest a visitor levy will be in place in any part of Wales is 2027.

The visitor levy will put power into the hands of local communities and give them a tool to encourage sustainable, regenerative tourism.

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A local tourism levy for Wales: your questions answered

This week is Wales Tourism Week . Before the pandemic, in 2019, there were 87.3 million day visits, just under 10.7 million overnight domestic trips, and a little over 1 million international trips to Wales . Tourism is important to Wales. Provisional figures for 2019 show tourism generated a Gross Value Added (GVA) of £3.4 billion , contributing 5% GVA to the Welsh economy.

The proposed tourism levy is a hot topic within the sector. Tourist levies are common in many tourist destinations across the world. They’re used to finance the maintenance and upkeep of tourist facilities as well as caring for the environments that tourists visit.

The Welsh Government’s Programme for Government and the Cooperation Agreement both pledge to introduce legislation to allow local authorities to charge a tourism levy.

This article explains what the tourism levy is, the wider context of tourism levies globally and in the UK, and the arguments being made for and against introducing a levy in Wales.

What’s the Local Tourism Levy and why’s it being proposed?

The Local Tourism Levy would be applied to overnight stays in Wales. The decision to charge a levy would be left to individual local authorities, and the money raised would be invested into the local authority area.

The Minister for Finance and Local Government, Rebecca Evans, says the levy is an opportunity for local authorities to “manage and invest in the services and infrastructure which make tourism a success”, whether this be cleaning beaches or maintaining toilets and footpaths.

The levy is being proposed to support the future of tourist locations by promoting a more sustainable approach to tourism. The exact fee visitors will be charged hasn’t been decided yet.

What’s the international context of tourist levies?

Tourist levies are used in many places across the world. In Europe, tourist levies, or occupancy taxes , are charged on short-term stays, usually applying to each person (with exemptions for children) per night.

They’re as low as €0.10 in Bulgaria and as high as €7.50 in Belgium . Levies can also vary by accommodation type. In Paris, for example, levies range from €0.20 for campsites to €3.00 for five star hotels , plus additional departmental and regional taxes paid on all types of accommodation. This compares to somewhere like Porto where €2 is charged per person per night regardless of where you’re staying. In some places, such as Berlin (5%) and Vienna (3.2%) , levies are charged as a percentage of the accommodation cost.

Not all tourist levies are charged on a nightly basis. In Japan, visitors pay a flat-rate of 1,000 Japanese yen (about £6) to cruise or airline operators when they leave the country . New Zealand’s International Visitor Conservation and Tourism Levy is a single fee of NZ$35 (about £18), which is paid before visitors enter the country.

What about tourist levies in the United Kingdom?

The prospect of a tourism levy isn’t ground-breaking within the UK, having been discussed in the UK Government’s 2007 Lyons Inquiry into Local Government . While an overall levy for England wasn’t supported, a suggestion was made to the UK Government to consider the costs and benefits of allowing local authorities to raise a tourism tax. The then Labour UK Government and opposition parties were in agreement about not pursuing the recommendations .

Local tourism levies have subsequently been considered for a number of places in the UK, including London , Liverpool , Cornwall , and Bath , but none have followed through with these proposals.

In 2019, the Scottish Government consulted on the principles of a “transient visitor levy” in response to tourism pressure in certain areas in Scotland. The proposal was put on hold in March 2020 and plans haven’t yet resumed.

Regarded as a UK first, a tourism-related charge was implemented at the local level in 2014. The London Borough of Hackney launched a project with a voluntary £1 donation added to stays in certain local hotels, up to a maximum of three nights. Donations form part of the Hackney Community Fund, which has been earmarked to support hospitality training schemes, cultural events, and fund improvements to public spaces in the borough. It’s unclear what the impact of this initiative has been.

What does the Welsh tourism sector think?

The Wales Tourism Alliance (WTA) acknowledges the use of tourism levies in other countries , but emphasises that where levies are implemented, rates of VAT are typically lowered on tourism and hospitality. With the current UK-wide rate of VAT, the WTA suggests introducing a tourism levy would be a form of “double taxation” when compared to other destinations. It’s also concerned the additional cost might discourage visitors on lower incomes from coming to Wales, or travelling within Wales itself.

UK Hospitality Cymru has labelled the tourism levy as “the wrong tax at the wrong time” , given the impacts of the pandemic on the sector. It has also said that increased prices might push customers to competitors , with Llandudno Hospitality Association expressing similar observations about the impact that a levy could have on the competitiveness of Wales with other tourist destinations in the UK.

Anglesey Tourism Alliance recognises tourism levies work in other destinations , but warns against a “knee-jerk reaction” and calls for consultation with the sector and visitors.

Where are we now and what happens next?

The Minister recently approved funding for three research projects to support development of the levy. It’s been reported the research will consider the economic impacts of a tourism levy; the tax systems of other countries where tourism levies are used; and an assessment of the demographics of the accommodation sector in Wales.

The Welsh Government is due to consult on draft legislation for the levy in Autumn 2022.

Article by Isobel Pagendam , Senedd Research, Welsh Parliament

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STOP LABOUR AND PLAID’S TOURISM TAX

The Labour Government and Plaid Cymru want to deliver a hammer blow to our vital tourism sector with a tourism tax for Wales. Just when the industry is building back from the pandemic, it needs our support not to be punished. Thousands of jobs are at risk if we don’t stop Labour and Plaid’s tax on tourism.

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The Labour Government and Plaid Cymru want to deliver a hammer blow to our vital tourism sector with a tourism tax for Wales. Just when the industry is building back from the pandemic, it needs our support not to be punished. Thousands of jobs are at risk if we don’t stop Labour and Plaid’s tax on tourism. 

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Andrew RT Davies, MS for South Wales Central, was responding to a tweet from Kate Nicholls, CEO UK Hospitality in which she said: “Welsh hospitality has seen biggest fall in revenue over pandemic and a far slower rate of recovery.

“A tourist tax would deter visitors to Wales and with businesses already paying £1 in every £3 earned in tax make many unviable. Need strategy to boost demand turbo charge recovery”.

In a quote tweet, Mr Davies said: “The Labour/Plaid tourist tax plan is a nationalist dog whistle that will put a roadblock on our road to recovery. After a battering from Labour’s restrictions, now Welsh hospitality is facing a battering from the separatists.”

The Labour/Plaid tourist tax plan is a nationalist dog whistle that will put a roadblock on our road to recovery. After a battering from Labour’s restrictions, now Welsh hospitality is facing a battering from the separatists. https://t.co/03l5GFx9mI — Andrew RT Davies (@AndrewRTDavies) February 13, 2022

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, according to Labour and Plaid.

In October, the Welsh Government and Plaid Cymru have confirmed a consultation on proposals for a local visitor levy will launch in autumn 2022.

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

Plaid Cymru’s Designated Member Cefin Campbell MS said that the “measure will help support a sustainable rather than an extractive tourism sector”.

This week, North Wales Tourism chief executive Jim Jones hit out at the “regressive” move, saying it would be an “absolute disaster”, which would “damage an industry that is already reeling” from the pandemic, and is already “already heavily overtaxed” in Wales.

The Welsh Government’s Programme for Government, and the Cooperation Agreement between the Welsh Government 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.

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the tax will help cover the losses in money from the tory government for the last 10 years which andrew seems to constantly forget and most tax money goes to the tory government again in westminister we have to change things here and alot

This makes absolute sense. Many countries already have this and I doubt anyone would object to paying a relatively small sum to help ensure tourism in Wales is sustainable (it isn’t in many places at present). Revenue raised could be used to help repair damage eg to footpaths/roads/environment, clear extra rubbish etc ie recompense for the local population which has to endure huge influxes of visitors and all the associated problems such as gridlocked roads (not every local owns or has a job in a tourism related business). Tourism bosses should see this as a positive as I can see …  Read more »

Tonight’s ‘Countryfile’ programme (BBC) featuring Eryri was very pertinent to this issue. The cost of maintaining and repairing paths in this area—as shown in the programme— must be very high indeed. This, of course, is only one instance of tourist-induced expense which falls on local authorities in Welsh rural holiday areas. Tourism on the scale experienced in many parts of Wales  in summer 2021 comes at a cost. Numerous countries levy tourist taxes. The Welsh hospitality industry protests too much.. 

I feel unclean sharing a nationality with this pos.

Tourist tax? We also need a Tory tax: they’re costing the country a fortune.

He might have a point if he suggested a wealth tax instead.

We already have a wealth tax imposed by the UK regime: It is called inflation ! The UK regime’s Bank of England has been printing bank notes without wealth backing, therefore, reducing the value of the pound £.

The UK controlled Conservative party is a waste in Wales as it diverts support away from building a new Wales based EPP party which will act for Wales: A Wales in Europe and the world.

Some of the most successful economies in the world have a tourist tax, inc Japan, Germany, and most tourist destinations inc Greece and Spain, with Thailand reportedly starting a tourist tax in April. None of these countries suffer due to this tax, so why would Wales? More Tory bluster. Didn’t Airbnb back the call on the tax only a few weeks ago. Same old Tory ‘s, if it is not a Tory Downing St idea, and not happening in England, it must not be allowed here.

No more second homes in wales and 100 taxes on all second homes in wales 🏴󠁧󠁢󠁷󠁬󠁳󠁿 It’s time for a new wales 🏴󠁧󠁢󠁷󠁬󠁳󠁿 kick out all English party’s out of wales 🏴󠁧󠁢󠁷󠁬󠁳󠁿

Nice comment from the Welsh Tories’ arch dog whistler ! ARTD doesn’t do irony.

The principle adopted in an increasing number countries experiencing mass tourism is “You make the mess, you pay for us to clean it up”. Seems reasonable.

So let me get this right, the leader of a party which says it wants more powers devolved to local authorities in Wales and criticises the Welsh Government for not devolving more powers to local authorities is criticising the Welsh Government for devolving more powers to local authorities?

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Wales to consider introduction of tourism tax

• Welsh Government
• Tuesday 15 June 2021 at 6:39pm

A proposed tourism tax charged to people visiting Wales would "benefit the industry", the First Minister has claimed.

The Welsh Government pledged to consult on legislation that would permit local authorities to raise such a levy in its five-year plan, which was published on Tuesday.

Mark Drakeford told the Welsh Parliament that the idea of a tourism tax had "taken root" across the world, including in places such as Bath, Liverpool and Aberdeen.

"It is about giving the power and the authority to local authorities in Wales to make a decision for themselves as to whether or not a tourism levy would allow them better to go on investing in the circumstances that make those areas attractive to tourism," Mr Drakeford said.

"I'm very clear in my own mind that a tourism tax, properly done, will benefit the industry because what it will allow those local authorities to do is to invest in the things that make those areas attractive to tourists in the first place.

"At the moment, it is those local resident populations who pay for everything.

"They pay for the toilets, they pay for the car parks, they pay for the local museum, they pay for the local festival - anything that is put there to attract people into the area, it is those local residents who bear the cost in full.

"A tourism levy, charged on people who choose to go to those areas, in a very modest way, when you add it all up, could be a significant opportunity for local authorities to invest in the conditions that make tourism a success."

Mr Drakeford said local authorities would be "under no obligation" to impose such a tax if they did not want to, and that there were no plans to raise taxes in Wales "while the economy is recovering".

But critics of the plan say it would be damaging for the tourism sector in Wales.

Andrew RT Davies, Senedd leader of the Welsh Conservatives, called for families and businesses in the country to have "support, not more taxes".

"Labour's plans to introduce a tourism tax and a potential income tax rise will be devastating for hardworking Welsh people," he said.

"Tourism is a major employer in Wales, creating hundreds of thousands of much-needed jobs, and a tax on holiday-makers would damage local economies and cost livelihoods.

"Instead of economic recovery, Labour seem intent on clobbering Wales with a menu of tax rises at a time when they should be doing everything they can to keep money in people's pockets."

Ministers should prioritise keeping taxes "as low as possible" to encourage economic growth during the recovery from the Covid-19 pandemic, Mr Davies added.

In 2018, a report for trade body Wales Tourism Alliance said such a tax in the country would "inhibit growth, employment, revenue and holiday-taking" and "hit those who are least able to afford to take a holiday".

Tourism taxes are common in European capitals such as Rome and Paris, where visitors pay small fees per person per night spent in accommodation to go towards maintaining and improving the area.

The national Government's risk-based traffic light system for travelling abroad means holidaymakers have been encouraged to opt for UK destinations this summer, particularly since the emergence of several variants of the virus.

The pledge to consult on legislation permitting local authorities to raise a tourism levy was included in the Welsh Government's Programme for Government.

Other plans in the 17-page document include for care workers in Wales to be paid a real living wage, which Mr Drakeford said would recognise the "huge contribution" that they had made during the pandemic.

It is hoped that workers would begin receiving the real living wage - which is #9.50 an hour for those outside London - in the first half of this Senedd's five-year term.

Mr Drakeford claimed the programme, which follows Welsh Labour's election success in May, would make Wales "stronger, greener and fairer".

Aims include everyone under 25 having the offer of work, education, training, or self-employment, 30% of workers working remotely, abolishing the use of single-use plastics, and building 20,000 low-carbon social homes for rent.

Mr Drakeford told the PA news agency that a switch to remote working would "gain a series of other benefits", including limiting the impact of travel on the environment and air pollution.

Responding to the Programme for Government, Mr Davies said it did "not inspire confidence", while Plaid Cymru deputy leader Rhun ap Iorwerth described the plan as "thin in detail and absent of targets".

First Minister to commit to putting climate change at heart of government policymaking

Home » The Welsh Agenda » Voices » Tourism Tax on Wales: A Colossal Mistake?

Tourism Tax on Wales: A Colossal Mistake?

Peter Fox and Tom Giffard warn against the potential impact of a Welsh tourism tax on the sector.

From the rolling hills of Monmouthshire to the white sands of Gower’s famous beaches, or even the rich Welsh landscape, Wales is the capital of global tourism and rightly boasts of having something iconic for everyone to enjoy.

Such is the popularity of Welsh tourism that the vital sector now accounts for an eye-watering 9.5 per cent of total employment across our country.

Simply, this means hundreds of thousands of jobs across the length and breadth of Wales are entirely dependent upon this key pillar of the Welsh economy.

However, the tourism sector hasn’t always had it easy in recent years, with COVID-19 in particular pushing it onto a cliff edge; fortunately, its resilience, in addition to the furlough lifeline thrown by the UK Government, saved countless jobs and livelihoods.

But there is a new horror now lurking on the horizon, and one that could potentially wreak financial havoc on our country.

That threat is the tourism tax which would impose a levy on visitors coming to Wales, making the tourism sector less competitive and portraying Wales as more expensive to visit.

The tax will do nothing to create more jobs, businesses or opportunities

The Welsh Conservatives have led the way in voicing our opposition to the planned tax.

Any decision to impose the tax on hard-working businesses would be a colossal mistake because it would undoubtedly hammer aspiration and opportunities into the ground.

And with almost 10 per cent of the Welsh work force employed in the tourism sector – why would anyone wish to put that at risk?

It would seem that the pioneer of the tax, the Welsh Government, is intent (for some reason we cannot fathom) on using the tax to keep the Welsh economy stuck in first gear.

Allow us to be clear: the tax will do nothing to create more jobs, businesses or opportunities.

Instead, the Welsh Government should be using a laser-like focus on attracting more international visitors to Wales. 

Moreover, it is a fact that pre-pandemic Wales received an estimated one million out of the 40 million visitors who holidayed in the UK. 

That statistic shines a spotlight on the need to tear down existing barriers hindering potential visitors – and that is an area where the Welsh Government really needs to grapple quickly.

Surely, Welsh Government Ministers can grasp the simple fact that the proposed tax, which would put visitors out of pocket, will not be an incentive, but a deterrent to visiting our glorious country?

The evidence and calls against a tourism tax are mounting by the hour, with the influential Wales Tourism Alliance being the latest to hit out. 

Therefore, we urge Welsh Government Ministers to see the writing on the wall and not pursue this cause.

Hundreds of thousands of jobs depend on it.

All articles published on  the welsh agenda  are subject to IWA’s  disclaimer .

Photo by  Jayanth Goulla  on  Unsplash

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