reprinted from:

State plan to tax tourists meets strong opposition

By Chris Dooley and Maol Muire Tynan
Copyright 1998 The Irish Times
Reprinted with permission
Article date: July 23, 1998
 

The Government announced last night that it has agreed to introduce legislation allowing Bord Failte up to £50 million in grant aid for tourism support. Under present arrangements, Bord Failte can avail of only up to £22 million in tourism support aid. No adjustments have been made since 1995.

The move follows sharp criticism by the tourism industry and Opposition TDs of a Government plan to tax incoming tourists.

A spokesman for the Minister for Tourism, Dr. McDaid, confirmed that a possible £3 tax on all visitors was being "talked about". He said the proposal would raise about £15 million for overseas tourism marketing.

The Incoming Tour Operators' Association (ITOA) said such a tax would damage the industry and reduce tourism revenue. Fine Gael's finance spokesman, Mr. Michael Noonan, said it was an eccentric proposal which would hardly encourage more
visitors.

"It is a principle of taxation that if you tax something you get less of it, and if you reduce tax you get more."

The Irish Tourist Industry Confederation, which represents commercial tourism interests, said it was unhappy with the way the proposal had been leaked while discussions on funding were taking place. "Imposing a tax on tourists would be a serious move and needs to be considered carefully," the confederation's chief executive, Mr. Brendan Leahy, said. The £3 tax is being considered in part as a replacement for the expected reduction in EU funding for Irish tourism after next year. Mr. Leahy said decisions on new methods of funding should not be taken until the new level of funding from Brussels was known.

If the tax is imposed, it is likely to be introduced in the next Budget and implemented next year. Dr. McDaid's spokesman said other revenue-raising measures had been considered, including a 50p "bed-night levy" and a corporation tax on major tourism
interests, such as airlines and ferries, hotels, banks and publicans.

He said the levy would have been too difficult to administer, while a new tax on business "wasn't considered a likely runner".

The alternative being proposed by Dr. McDaid was an "access tax" which would be charged for all journeys originating outside the island of Ireland. "It would be £2 or £3, the price of a pint. It wouldn't be collected from the Irish taxpayer but from people coming into the country".

He said the move - which it is understood would not be contrary to any EU law - would not affect the number of tourists, which last year reached five million. The ITOA, whose 36 members deal with around 300,000 visitors a year, said the proposed tax would damage the short-break market.

Fine Gael's tourism spokesman, Mr. Bernard Allen, said the proposal was "bizarre".
 

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