BHA Wales active opposition to a proposed tourism tax in Wales featured strongly as the planned tax received cross-party condemnation in a National Assembly for Wales debate.
The Welsh Assembly debated a motion by Nick Ramsay AM (Monmouth) proposing that “the National Assembly for Wales: Does not believe that a tourism tax should be implemented in Wales”. This follows a proposal by the Welsh Government in the recently announced budget for 2018-19 of four new proposed tax ideas, including a Tourism Tax, of which one would be presented for future legislation to Westminster.
The debate heard cross-party opposition to a measure which would damage an industry critical to the success of the Welsh economy.
Conservative AM Russel George (Montgomeryshire) expressed the concerns of Anthony Rosser, BHA Wales Chair that a tourism tax would hand an unfair advantaged to competitors in England, a sentiment that has been echoed by the industry and other representative bodies including FSB Wales, saying:
‘We…have very real worries over the recent cauldron of costs that have boiled over in the last 18 months, including increases in business rates…rising inflation and food and energy hikes…The introduction of a tourism tax would compromise the progress that has been made to boost Wales’ visitor economy and… put Wales at a disadvantage to other locations within the UK’.
Nick Ramsay AM, stated that the proposal has been met with widespread criticism:
‘It’s crucial that the Welsh Government protects and supports the Welsh tourism sector so that it continues to make a healthy contribution to our economy’.
Plaid Cymru’s Steffan Lewis AM pledged his support for the campaign saying:
‘Our tax system, overseen by the United Kingdom Government, currently puts Wales at a disadvantage. Plaid Cymru has repeatedly called for a VAT cut on tourist services from 20 per cent to 5 per cent…. Evidence suggests that the reduction would create over 5,500 thousand jobs in Wales, whilst injecting £166 million into the Welsh economy’.
UKIP’s Caroline Jones AM (South Wales West) highlighted findings of the Campaign to Cut Tourism VAT’s report that ‘the UK has the highest tourism VAT in comparison with other countries, being nearly 3% higher than Germany’.
Mohammad Asghar AM (South Wales East) urged the Welsh Government to ‘think again and again, and withdraw this damaging and potentially disastrous tax’.
Welsh Labour, whose government had proposed the idea to allow a public debate of the four different taxes- alongside a tourism tax are proposed taxes for social care, vacant land and plastic bottles- was few in numbers during the debate. Welsh Government Finance Secretary Mark Drakeford AM concluded the debate by saying that the Welsh Labour Party simply believes that a tourism tax is an idea that is worth exploring and wanted to provide the opportunity to do so. His colleague Joyce Watson, defending the discussion around a tax, called tourism the “lifeblood” of her constituency.
The issue will be raised again by Plaid Cymru at the UK Budget on 22nd November who will be placing an amendment to the UK budget in order to achieve a cut in VAT in tourism.