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Fury as French hotel tax set for fivefold increase

Joshua Melvin · 27 Jun 2014, 10:57

Published: 27 Jun 2014 10:57 GMT+02:00

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The hotel industry warned French lawmakers on Friday that a proposal to slap a five-fold increase on France’s lodging tax (taxe de sejour) for the most luxury hotels would have disastrous effects on their businesses already struggling against a dire economy.

Their warning came after lawmakers in the National Assembly approved an amendment this week that would allow municipalities around the country to push the tax up to €8 at four and five star hotels from the current cap of €1.50 per night, per person.

A slightly smaller increase, of up to €5 tax, would be permitted at three star hotels. Local hotels, who could adopt a lower rate if they chose, would then decide how much to charge their clients.  

“Members of parliament are adopting irresponsible measures that will have grave consequences for our hotels, which me must remind are “Made in France” businesses,” Roland Heguy, president of hotel union, Union des Métiers et des Industries de l’Hôtellerie, said in a statement.

“The hotels that I represent are extremely angry, and request that members of parliament and the government instantly stop this massacre," Heguy added.

The hike would be particularly steep in the Ile-de-France region around Paris because lawmakers have also backed adding an additional €2 tax on top of the proposed €8 cap, meanign the taxe de sejour could reach €10 in the country's capital. The extra tax is expected to generate some €140 million per year and would be earmarked to pay for public transit projects around France's largest city, which lawmakers noted will help tourists get around more easily. 

These proposals come in response to a long running complaint from local politicians around the country, who’ve protested the €1.50 cap was too low.

This week the proposed tax hike finally made it to the floor of the National Assembly, but we can expect the hotel industry will not take it lying down. Some powerful politicians have already come to their aide.

According to Europe1 radio France's foreign minister Laurent Fabius is firmly against the hike.

Fabius, who is also in charge of tourism, laid out plans recently to increase visitor numbers to France from the current 83 million a year to 100 million in the coming years. A five-fold hike in the hotel tax was not, it seems, what he had in mind.

Hotel and restaurant owners were already angry over a hike earlier this year that brought VAT up to 10 percent in their establishments. Though the government cut the tax from 19.6 percent down to 5.5 percent over four years ago, it's been going up since.

Restaurant owners complained they're trying to survive the recession and the government keeps making that harder to do.

"They're killing us, squeezing us like lemons! They raised the cost of beer in July and then again in November," Eastern France restaurant owner Eric Barbe told French paper Bien Public in 2013. "We're not going to be able to pass this increase on to our customer, people aren't going to be able to keep up."

Joshua Melvin (joshua.melvin@thelocal.com)

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