A proposed 'bed tax' for visitors to Dublin has been labelled 'unwarranted' and 'inherently unfair' by a leading hotelier.
The manager of Buswells Hotel in Dublin 2, Paul Gallagher, has criticised the proposals from Dublin City Council (DCC) after a report suggested that the move could raise more than €12m.
Enterprise Minister Simon Coveney has said the proposal needs to be assessed as it may require legislation through the Dáil. And the hotel industry is resisting the move, saying it already pays its fair share of tax.
Yesterday, Mr Gallagher, a former president of the Irish Hotels Federation, said the industry already pays 'sufficient tax' to the Exchequer through 'various sources'.
He told RTÉ's News At One: "Typically 32c on every euro that we transact goes back to the State in tax. The hotels in Dublin already pay rates to the different councils of €36m a year. So we are adequately paying for service that we are asked to.
In Association with
"But a room tax is inherently unfair. It is not equitable, and that only one sector is going to be asked to collect a tax for consumers who consume many various products and services across the city."
The DCC report released on Monday suggested a tax of 1% on overnight accommodation could raise €12.2m a year for the capital.
This was based on an average occupancy rate of 78.5% and an average daily rate of €171.
It has broad support among Dublin councillors, who see it as a way to cover holes in the city's budget and address issues in the north inner city.
However, the report said the council doesn't have the legal power to introduce the tax and that it would likely require a Dáil Bill. Mr Coveney said it would need to be assessed and that if it requires legislation, the full implications and consequences of it would need to be understood.
"I think we need to assess what's the appropriate thing to do at the moment to try to keep hotel rooms affordable and also to ensure that hotels themselves remain in business," he told RTÉ.
One of the proponents of the tax, Dublin councillor and former lord mayor Hazel Chu, said councillors want to improve the city's culture and safety but that there is not enough money to do so.
However, junior minister Patrick O'Donovan objected to the proposal, saying the council already makes enough money through property tax and commercial rates.
"Dublin councillors are removed from the reality of the costs associated with visiting Dublin - it's hugely expensive," he told RTÉ's Today With Claire Byrne show. "It's probably cheaper for someone to go to Dublin Airport now, fly to Rome and stay overnight than it is to do that in Dublin in spring."
Earlier this week, Independent Kerry TD Michael Healy-Rae vowed to 'vehemently' oppose the tax in the Dáil, and warned that the council would be "killing the golden goose" if it tries to charge rural people even more for staying in Dublin.
The idea of a 1% hotel tax was first proposed by the Commission on Taxation and Welfare and is backed by the council's report. Rates for this type of tax across EU member states range between an average of €0.40 and €2.50 per night, and vary depending on the type of accommodation.
The report will go before Dublin City Council's finance committee tomorrow.
