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Transport for London (TFL) is in need of a cash boost after losing money during the pandemic. A new tax could see tourists charged to visit the city.
Professor Tony Travers of the London School of Economics told the London Assembly that a tourist tax could earn the city hundreds of millions of pounds a year.
He suggested that any money earned could be used to fund TFL and to help the city operate the extensive network.
TFL’s income collapsed during the pandemic and has yet to completely recover. A tourist tax could be one solution to the funding gap.
Professor Travers suggested that a tourist tax of a few pounds per night for international tourists could produce long-term funding for TFL.
If every international tourist paid around £2.50 extra per night in a tourist tax, London would earn around £102 million per year.
Mayor of London Sadiq Khan and the Chair of TFL, has said: “Without a long-term funding deal, TFL will have to prepare to make further painful cuts to London’s transport network.”
At the moment, the tourist tax is only a proposal and visitor levies are generally a controversial issue.
Some people believe they can be a useful way to fund a city’s essential services while others think taxes can put off international tourists.
Over 20 million international tourists visited London in 2018 and it is one of the world’s most visited cities.
The city struggled to recover numbers during the pandemic and many hospitality venues lost out on income.
Tourists spent over £2,000million in London in 2019 although this fell to £409 million in 2020.
However, the number of international tourists is now on the rise, showing a steady increase since July 2021.
The UK is an outlier in Europe when it comes to tourist taxes, as many European countries have chosen to implement one.
Taxes are normally implemented on a regional basis, with areas in Spain such as Barcelona and the Balearics operating their own tax systems.
In 2007, a tourism levy was proposed to the UK Government but the recommendations were rejected.
A number of other British destinations have considered introducing a tax including Bath,Cornwall and Liverpool.
Wales is currently considering introducing a tourist tax to provide extra funding for honeypot areas.
The tax would apply to overnight stays in the country and the decision would be left up to local authorities.
Money raised could be used to clean beaches, maintain public toilets or keep footpaths in good condition.
The Welsh Tourism Alliance has said that the additional cost might discourage lower income visitors from travelling to Wales for holidays.
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