Mid Wales tourism industry leaders are worried that the Welsh Government is pressing ahead with a proposed tourism tax before fully understanding the potential impacts.
The tax moved a step closer on Tuesday night when the proposal was agreed in the Senedd, despite being strongly opposed by the tourism sector which says the Welsh Government does not have the data it needs to properly justify supporting the new legislation.
The Visitor Levy Bill passed the third stage in the Senedd, which means it will likely be approved later this month before seeking Royal Assent from the King.
The new legislation will give councils the power to charge people up to £1.30 per person, per night for overnight stays in visitor accommodation.
The Welsh Government estimates the levy could raise around £33 million a year if adopted by all local authorities across Wales.
However, councils can choose not to introduce the charge which Pembrokeshire, Wrexham, Caerphilly and Rhondda Cynn Taff have already done. The Vale of Glamorgan Council, Swansea Council and Newport City Council say they have no current plans to pursue the tax.
Tourism leaders have warned that the tourism tax could cost more to administer than it actually raises.
The proposed tax is strongly opposed by the tourism sector which has been flooded with Welsh Government rule changes, including the controversial 182-day rule. If visitor accommodation is not occupied for a minimum of 182 days of a year, the owner faces paying double or possibly triple council tax.
Tourism businesses in rural Wales, particularly, are being impacted severely by this rule change, which has forced some to leave the sector and left others with bills of up to £20,000.
Leaders at MWT Cymru (Mid Wales Tourism), which represents more than 600 tourism and hospitality businesses across Powys, Ceredigion and Meirionnydd, are very concerned.
They have called for the tourism tax to be delayed until there is a register of all tourism businesses in Wales. There is anger in the sector that whilst registered businesses pay business tax, commercial recycling and other charges, unregistered rivals unfairly operate under the radar and avoid all the bills.
Zoe Hawkins, MWT Cymru chief executive, is disappointed that the Senedd rejected an amendment to compile this register before a tourism tax decision is made.
“Members of the Senedd are being asked to make a decision without crucial data or a full understanding of the potential impacts,” she said. “Robust, evidence-led policymaking is vital, especially when rural communities and the wider visitor economy are already under immense strain.
“Policies like this could potentially have long-lasting and damaging consequences, as we saw with the 182-day rule, which was intended to target second homes. Instead, we are already seeing the evidence that it is harming genuine tourism businesses and farming families across Mid Wales, which the sector had previously warned was a likely outcome.
“Decisions must be properly reviewed and scrutinised as part of a joined-up approach, not taken in isolation. Our politicians need to be 100 percent sure that due diligence has been done when being asked to decide a policy which could have severe, unintended consequences, particularly in rural areas.
“If the visitor levy is truly in the best interests of Wales, as it should be, taking the time to get it right isn’t just sensible, it’s vital.”
Suzy Davies, MWT Cymru’s vice chairman, also warned about the wider impact of the levy. “This has long ceased to be a ‘tourism tax’, charging visitors for the privilege of a holiday in Wales – it’s a fee for staying in visitor accommodation for any reason,” she said.
“People going to a funeral, going into hospital, visiting loved ones in hospital or care homes, giving evidence in court, even escaping domestic violence – they will have to pay.
“Visitor accommodation providers will have to be registered as a result of this legislation. This should help reassure visitors that properties are safe and legal, as well as providing a database of businesses which will be responsible for collecting the tax.
“Unfortunately, the Finance Secretary refused to compel councils to chase operators avoiding registration and collecting the tax so, once again, we see another burden which falls on the shoulders of the businesses playing the game not gaming the system.
“I’m pleased to see that some local authorities have already indicated that they will not or have no plans to introduce the tax. This must give neighbouring counties pause for thought, especially in Mid Wales.
“This policy is built on the premise that all councils will participate and raise an unsubstantiated amount of money from an unknown number of visitor accommodation providers.
“With some already refusing to introduce a levy, no register of accredited businesses and an eye-watering predicted cost of the local and central administration of the legislation, there will be precious little money left to make any meaningful impact on improving the experience of residents or visitors.”
