Dublin city councillors have endorsed a plan to levy a hotel tax that would raise a minimum of €12 million a year from visitors.
The 1 per cent tax was first mooted by the Commission on Taxation and Welfare and has been backed in a Dublin City Council report.
Rural TDs and the hotel industry are opposing the measure, suggesting that it amounts to a further tax on people visiting an already expensive city, but members of the council’s Finance Strategic Policy Committee support it.
Cllr Paddy McCartan (Fine Gael) said he was “quite insulted” by comments made by Minister of State Patrick O’Donovan that Dublin councillors did not understand the reality of how expensive the city was for visitors and asked to be dissociated from Mr O’Donovan’s comments.
He said the rate was “modest” in comparison with those in cities such as Barcelona, which hopes to take in €240 million a year.
“We have a responsibility as city councillors to maximise the return for the benefit of the city,” he said.
Six million people visited Dublin in 2017 and he did not believe any of those would shirk at paying a modest tax.
Cllr Dermot Lacey (Labour) criticised the “childish response” of Mr O’Donovan suggesting that Dubliners did not like the GAA or Garth Brooks. “It shows an extraordinary lack of knowledge on his part about the funding of local government.”
A 1 per cent charge would “not stop one solitary single person” from visiting Dublin, he said, and “it is reasonable to expect that people coming to the city would pay a small contribution to mutually beneficial services so that the money could be spent on tourism-related projects and to keep the city cleaner”.
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Local authorities should be given the choice locally to raise the money or not, he suggested. His party colleague, Cllr Alison Gilliland, said a 1 per cent tax would not be a “deal breaker” for tourists.
Green Party councillor Donna Cooney said there should be cross-party support for the levy. It was not a matter of an urban-rural divide, she said, and if all local authorities did the same it could improve the standard of their tourism product.
“It is something that will benefit everybody”.
Cllr Nial Ring (Independent) said he agreed with an “accommodation tax” on principle, but it would not go straight to the local authority and therefore would not be worth pursuing.
Irish Business and Employers Confederation (IBEC) head of enterprise and regulatory affairs Aidan Sweeney said Dublin cannot be compared to cities such as Barcelona. Tourists staying in hotels in Dublin will contribute at least €100 million in taxation revenue and the city has some of the highest overheads in Europe.
“You are layering 1 per cent on a sector that has been closed for two years,” he said.
Committee chair Cllr Séamus McGrattan said the majority of councillors were in favour of the measure. He suggested the council should write to Minister for Finance Michael McGrath and enclose a copy of the report recommending the introduction of the tax.
Speaking after the launch of TradFest 2023, the Minister for Tourism Catherine Martin said the decision on whether to introduce the tax should be made by Mr McGrath. She cautioned, though, that it is not a “straightforward issue” as large amounts of taxation revenue already go from the tourism sector to Government.
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“There are a lot of issues to be teased out about this. Who will pay that? Will it be international tourists or domestic tourists? How will it be paid?”
She said there needed to be a “thorough assessment” of the proposal before any decision could be considered.