A new report has warned about the potential damage a tourism tax would cause to the industry as the Wales Tourism Alliance has re-affirmed its total opposition to the proposal which is being considered by the Welsh Government.
Members of the Alliance, which represents all sectors of the tourism industry throughout Wales, have met with officials of Cabinet Secretary for Finance and Local Government Mark Drakeford’s Treasury team to express their concerns about a possible tax.
A tourism tax is one of four ideas for new taxes on which the Welsh Government has invited views. The Alliance is pressing the Welsh Government to reject the tax idea because of the adverse impact it would have on the tourism industry in Wales.
Having already lobbied fellow minister Ken Skates on the matter when he was responsible for tourism, the Alliance is now seeking an urgent meeting with new tourism minister, Dafydd Elis Thomas.
The Alliance is so concerned about the proposal that it asked tourism expert Professor Annette Pritchard to prepare a report on the subject. In her report, she warns that a tourism tax would damage the economic performance, brand and prospects for Wales.
The report states: “The UK tourism industry has one of the world’s highest tax burdens. Most European countries have significantly reduced VAT on their tourism industries to encourage growth, employment and revenue. The imposition of higher taxes has been shown to inhibit growth, employment, revenue and holiday-taking.
“Tourism outperforms all Welsh Government priority sectors and is the country’s second largest employer. A proposed tourism tax will damage its economic performance, brand and prospects.
“It will also increase social exclusion, undermine policies to create a more healthy and active Wales, limit opportunities for economic growth in Welsh-speaking heartlands and disproportionately impact those least able to afford to take a holiday.
Alliance chair Adrian Barsby has written to Wales’ First Minister Carwyn Jones, warning that tourism businesses had already faced significant business rate increases and a tourism tax would make them uncompetitive in the UK market.
Mr Drakeford has thanked the Alliance for its comments and stressed that at this stage the Welsh Government is gathering views on all of the tax ideas it has put forward.
“Professor Pritchard’s report states that prices will rise and Wales will gain the unenviable reputation of being the only country in the UK which charges its visitors to stay,” said Mr Barsby.
“This will damage the growth potential of the industry at a time when post-Brexit it may be called upon to play an even greater role in the Welsh economy.”
He added that the Alliance acknowledged that the industry imposed additional costs on local authorities, but the Welsh Government’s formula for allocating financial support to councils made explicit provision for this.
The Alliance is prepared to meet with the Welsh Local Government Association to discuss ways in which the industry may be able to help.
“We understand the pressures on local authorities at the most popular tourist destinations in Wales,” added Mr Barsby. “However, we believe that visitor management by the industry in collaboration with local authorities, Welsh Government and destination partnerships is the most sustainable way of dealing with such issues.
“I would add that whilst imposing additional costs on local authority services, tourism also helps to sustain a wider range of facilities for residents to enjoy than would be the case without the industry.
“A tax on tourism businesses would damage local economies and affect employment prospects by making us less competitive with destinations in England.”
For more information please contact either Adrian Barsby, Wales Tourism Alliance chairman, on Tel: 01352 741998 or 07921 787668, Adrian Greason Walker on Tel: --- or Duncan Foulkes, public relations adviser, on Tel: 01686 650818.