A Welsh tourism tax could damage the economy and increase social exclusion, warns a report.
Tourism expert Professor Annette Pritchard was commissioned to write the report by trade body the Wales Tourism Alliance, because the Welsh government is considering introducing a tax.
Her report said: “The UK tourism industry has one of the world’s highest tax burdens. Most European countries have significantly reduced VAT on their tourism industries to encourage growth, employment and revenue. The imposition of higher taxes has been shown to inhibit growth, employment, revenue and holiday-taking.
“Tourism outperforms all Welsh government priority sectors and is the country’s second largest employer. A proposed tourism tax will damage its economic performance, brand and prospects.
“It will also increase social exclusion, undermine policies to create a more healthy and active Wales, limit opportunities for economic growth in Welsh-speaking heartlands and disproportionately impact those least able to afford to take a holiday.”
Members of the Alliance, which represents the tourism industry throughout Wales, have met government officials to express their concerns about a possible tax.
A tourism tax is one of four ideas for new taxes on which the Welsh government has invited views.
The alliance is urging the government to reject the tax idea because of the adverse impact it would have on the tourism industry in Wales.
It lobbied minister Ken Skates when he was responsible for tourism, and the alliance is now seeking an urgent meeting with new tourism minister, Dafydd Elis Thomas.
Alliance chair Adrian Barsby said: “This will damage the growth potential of the industry at a time when post-Brexit it may be called upon to play an even greater role in the Welsh economy.
“A tax on tourism businesses would damage local economies and affect employment prospects by making us less competitive with destinations in England.”