Taxation Method Undetermined… Up to 460 Billion Won in Annual Collection Possible,
‘LONDON, Nov. 23 (Local Time) — The United Kingdom’s capital, London, which until now has been the only major city among the G7 countries without a tourist tax, is set to introduce one soon.’,
According to reports from BBC, UK Chancellor of the Exchequer Rachel Reeves plans to grant authorities to cities to introduce a tourist tax through the Decentralization and Local Community Empowerment Bill currently being processed in Parliament.’,
London Mayor Sadiq Khan has been a vocal advocate for the transfer of powers to local authorities to introduce a tourist tax.’,
While Khan’s office declined to comment on speculations regarding the introduction of London’s tourist tax, they expressed a welcoming stance, suggesting that introducing the tax could have positive effects. ‘,
The City of London emphasized that “a reasonable tourist tax, similar to other international cities, will help boost the city’s economy and fortify London’s reputation as a top global destination for tourism and business.” ‘,
Major cities in the G7, such as Paris, Munich, Milan, Toronto, New York, and Tokyo, currently impose tourist taxes, albeit through different methods. ‘,
Parts of the UK, including Scotland and Wales, have also recently introduced various types of tourist taxes targeting overnight visitors.’,
It has yet to be determined what type of tourist tax London will implement. ‘,
According to London city authorities, imposing a flat fee of £1 per day based on 2017 visitor numbers could yield about £91 million (approx. 175.3 billion KRW) annually, while a 5% tax on accommodation costs could generate around £240 million (approx. 462.1 billion KRW).’,
City authorities believe that travelers to popular urban destinations show low sensitivity to tourist taxes, suggesting that the tax’s introduction is unlikely to reduce tourism demand. ‘,
In contrast, London’s tourism industry expressed concerns that the tourist tax could have a significant impact.’,
Kate Nicholls, chair of ‘UK Hospitality’, representing London’s hotel industry, noted that the VAT rate in England, Scotland, and Wales is already quite high at 20%, arguing that “a tourist tax would essentially be a tax on a tax.” ‘,
She criticized, “Our customers are already paying the highest levels of taxation,” adding that “if taxes deter people from coming to London, it would result in taxes that take away jobs, growth, and investment.” ‘,