Seán Canney (Galway East, Independent) | Oireachtas source

I thank Deputy Geoghegan for raising a very important issue we need to get to grips with. I am responding on behalf of the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media pending the formal transfer of functions, following Government formation.

There are currently no plans to introduce a tourist tax or visitor accommodation levy but the Minister’s understanding and his view is that the introduction of such a levy would need careful consideration given the importance of inbound tourism to Ireland’s economy, local communities and the paid visitor accommodation sector.

A visitor accommodation levy would have to take account of issues, such as who would pay. For example, would its application be limited to international visitors or would it be extended to all visitors, including domestic visitors? The geographic scope of such a measure would also be an issue for consideration. Other issues arising include: scoping, identification and collection of relevant verifiable visitor data; collection of data regarding paid accommodation providers and their bed stock; the levy collection mechanism; the levy collector; and the potential administrative impact on paid accommodation providers. How the revenue raised from such a levy could be applied would also require close examination.

It is noteworthy that the introduction of a visitor accommodation levy was proposed in Foundations for the Future, the report of the Commission on Taxation and Welfare published in September 2022 and more recently in Capital City, the report of the Dublin city task force published in October 2024, specifically for Dublin city.

The Foundations for the Future Report in recommending the introduction of an accommodation tax stated:

Accommodation or city taxes (also referred to as tourist or transient visitor taxes) are largely focused on tourism or accommodation providers, and are typically levied on short-term stays in paid accommodation.

Across Europe, including in for instance Paris, Berlin and Vienna, such taxes are applied to hotel accommodation in addition to VAT.

Such taxes have been introduced across the globe in response to tourism consumption and the pressures it places on the provision of public goods and services. Consumers are generally responsible for paying such taxes, while the accommodation facility is responsible for collecting them.

Tourists and other visitors get a short-term benefit from public goods and services, such as water and sewerage systems, utilities, waste facilities, parks, security and public safety services, without having contributed to their funding. The rationale behind an accommodation tax is to ensure that those guests contribute to the ongoing costs of providing these goods and services. Depending on their design, accommodation taxes may also make the tourism industry more sustainable by providing a revenue stream that can improve environmental and economic sustainability as well as improving infrastructure.

An accommodation tax can be regarded as an adaptation of the general ‘polluter-pays principle’ to a ‘user-pays principle’ that calls upon the user of resources (i.e. the tourist) to bear the cost in a more sustainable way.

The Capital City report included the introduction of a tourist tax as one of a range of possible funding mechanisms “that could be leveraged to support implementation of this plan ringfenced for the city.” It also acknowledged that “Any decision on fundraising is a matter for government and is outside the remit of the Taskforce.” The recommendations of the latter report in full are now being considered by an interdepartmental group led by the Department of the Taoiseach and including officials from the Department.

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