The Welsh Government’s controversial tourism tax will be higher than initially proposed, it has been revealed. The slight increase was announced as the contentious legislation passed its first Senedd vote.
The original plan was for the levy to apply at one of two rates to anyone staying overnight in Wales, whether in an Airbnb, Vrbo or short-term let, or hotel, hostel or campsite. There will now be two levels of charge – 80p per person per night for people staying in hostels and on campsite pitches, and £1.30 per person per night for those staying in all other types of accommodation.
Groups such as the Scouts had previously raised concerns about the tax’s “unintended consequences.” Speaking in the Senedd, Finance Minister Mark Drakeford stated that, following discussions during the Senedd scrutiny process, he would exempt all under-18-year-olds staying at lower-rated accommodation from the levy altogether.
However, this means prices will rise for others from the originally proposed 75p to 80p and from £1.25 to £1.30 per night for the higher rate. Drakeford has confirmed that there will be no further changes beyond the treatment of children in relation to the holiday levy.
He stated: “Many suggestions have been made for exemptions from the levy. The changes to the treatment of children are the only ones I intend to introduce. Exemptions inevitably cause complexity. They erode the principle of simplicity, they add administrative costs to those who provide accommodation, they reduce the revenue raised by local authorities, or, as I’ve illustrated this afternoon, cause the levy to be increased for remaining payers. For all those reasons, the Government does not intend to go beyond the changes I have just indicated.”
He went on to explain that the visitor levy, also known as tourism tax, will be implemented at a council level , reports Wales Online. “It allows local authorities to decide whether or not to introduce a visitor levy in their areas, reflecting local needs and circumstances.
“Participating councils will have the option, but of course not an obligation, to apply a levy on overnight stays in visitor accommodation,” he added.
The aim, according to Mr Drakeford, is to ensure “the costs of maintaining the infrastructure and the services that help make Wales such a compelling destination are shared by those who benefit from them.”
He pointed out that levies are “common across the world” and if passed, Wales will become the 50th country to introduce a visitor levy.
Each of Wales’ 22 councils will have the autonomy to decide on the implementation of a new levy, which could collectively raise up to £33m a year if universally adopted. “It is simple, straightforward and fair. A flat rate levy, as we propose, is simple to understand, it’s clear to visitors and providers alike. Moreover, it is straightforward to administer. Most small businesses will only be required to submit one annual return, and all businesses will have the choice of making that return through an agent,” he explained.
The proposal for the tax has already seen success in its initial stage, passing with a vote of 40 to 15, with one abstention. However, there are more hurdles to clear before the levy can be implemented, and Mr Drakeford has indicated that it is unlikely to come into effect before 2027.
