The proposed hotel tax is intended to to be used to raise funds for city services and enable reduced commercial rates for smaller businesses in the capital.

In January of last year, the outgoing Dublin City Council’s finance committee proposed a 1% hotel tax. It was never introduced, but at the time it was claimed that such a tax would raise up to €12 million, which would have gone towards regenerating the city.

Tourism taxes are applied in many European cities, including Venice, Manchester, Barcelona and Lisbon.

However, the federation has said there are “no grounds for introducing an additional tourist tax on consumers and overseas visitors”.

“Hotels are already making an enormous contribution in terms of taxes both toward central exchequer finances and supporting local authority services.

“In Dublin, hotels pay approximately €1,000 per bedroom to Dublin City Council in commercial rates and levies to fund local authority services. In addition to this Dublin city centre hotels and businesses pay a further 5% levy toward enhancing the city experience for visitors, residents and workers,” it said in a statement to The Journal.  

The federation said that hoteliers and other hospitality businesses have seen the VAT rate increase by 50% last September, stating that it is an extra €560 million a year in taxes on tourists and Irish consumers.

It group highlighted that Ireland is now has the third highest tourism VAT rate in Europe.

“There is a fundamental reality at play when it comes to taxing tourists in that Ireland needs to remain competitive,” said the federation, who added that every additional increase in taxes in turn, increases the cost for visitors coming to Dublin.

They said hikes in taxes also make Ireland less attractive as a destination – “at a time when consumers are under financial strain”.

The group went on to say that the economic activity from tourism businesses, including hotels, makes a big contribution to the exchequer.

Author: Christina Finn