It has been revealed that the controversial tourism tax of the Welsh government will be higher than originally proposed. A small increase was announced as the controversial law passed the first Senate vote.
The original plan was to apply at one of two rates to anyone staying overnight in Wales, such as Airbnb, VRBO, or short-term Let, or hotels, hostels, campsites. Currently, there is a level of 80p charge per night for those staying at hostels and campsite pitches, while those staying at all other types of accommodations cost £1.30 per night.
Groups such as Scouts had previously raised concerns about the “unintended consequences” of taxes. Senator, Finance Minister Mark Drakeford, following discussion during the Senate's scrutiny process, he said that everyone under the age of 18 would be exempt from staying in totally low-rated accommodation from collection.
However, this means that prices will rise from the initially proposed 75p to 80p to 80p, to a higher rate of £1.25 to £1.30 per night. Drakeford confirmed that there was no further change in besides the treatment of children in relation to holiday levys.
He said: “Many proposals have been made for tax exemptions. I intend to introduce changes to the treatment of children. The exemptions inevitably cause complexity. They erode the principle of simplicity. The changes I have shown.”
He went on to explain that the collection of visitors, also known as tourism tax, will be carried out at the council level, Wales reports online. “Local authorities can decide whether to introduce visitor collection into the area, reflecting local needs and circumstances.
“The participating councils have options, but of course we are not obligated to apply the collection of overnight stays at the visitor's accommodation,” he added.
According to Drakeford, the aim is to “ensure that the costs of maintaining infrastructure and services that will help make Wales such a compelling destination are shared by those who benefit from them.
He pointed out that taxation is “common all over the world” and that if passed, Wales will become the 50th country to introduce visitors taxation.
Each of the 22 councils in Wales has the autonomy to decide to implement new collections. “It's simple, easy and fair. As we suggest, flat taxation is easy to understand and is clear to visitors and providers as well. What's more, it's easy to manage. Most small businesses need to submit one annual revenue, and all companies choose to choose that return through their agents,” he explained.
The tax proposal was already successful in the first stage, passing with 40-15 votes with one abstention. However, there are increasing hurdles to clear before taxation is implemented, and Drakeford has shown that it is unlikely to come into effect before 2027.
