A NEW report has warned about the potential damage a tourism tax would cause to the industry as an alliance once again expressed its opposition to the proposal which is being considered by the Welsh Government.

Members of the Wales Tourism Alliance, which represents all sectors of the tourism industry in Wales, have met with officials of Cabinet Secretary for Finance and Local Government Mark Drakeford’s Treasury team 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 pressing the Welsh Government to reject the tax idea because of the adverse impact it would have on the tourism industry in Wales.

Having already lobbied fellow minister Ken Skates on the matter when he was responsible for tourism, the Alliance is now seeking an urgent meeting with new tourism minister, Dafydd Elis Thomas.

A report by tourism expert professor Annette Pritchard warns that a tourism tax would damage the economic performance, brand and prospects for Wales.

The report states: “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."

Alliance chairman Adrian Barsby has written to Wales’ First Minister Carwyn Jones, warning that tourism businesses had already faced significant business rate increases and a tourism tax would make them uncompetitive in the UK market.

Mr Barsby said: "A tax on tourism businesses would damage local economies and affect employment prospects by making us less competitive with destinations in England."

A Welsh Government spokeswoman said: "The Cabinet Secretary for Finance confirmed a shortlist of new taxes alongside the draft Budget on October 3: these included a disposable plastics tax, a social care levy, a vacant land tax and a tourism tax.

"The latter of these would enable revenue to be raised to support the tourism offer locally. We have engaged widely on these proposals with different sectors and other stakeholders, and included a social media questionnaire to gauge support and interest in these, over November.

"The Minister is due to make a decision early this year on which of these taxes he would wish to take forward to the UK Government to test the Wales Act 2014 mechanism. Any proposals would be subject to a full public consultation before any tax is introduced."