A proposed tourism tax charged to people visiting Wales would “benefit the industry”, the country’s 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”.