France ‘to scrap’ steep rise in hotel tax

A controversial plan to slap a five-fold increase on hotel tax in France is set to be ditched, according to reports, after the government expressed its opposition to the rise.

France 'to scrap' steep rise in hotel tax
A plan to increase hotel tax in France by up to five times is set to be scrapped. Photo: Fred Dufour/AFP

France is expected to scrap a planned hike in the tax levied on hotel stays after an outcry by the tourist industry, the Journal de Dimanche newspaper reported on Sunday.

The draft law proposed by the lower house of parliament – which would have seen a five-fold increase in the tax – will be struck down by the Senate, the newspaper said without giving a source for the information.

The report follows criticism from Prime Minister Manuel Valls, who told RTL radio on Saturday that the proposed tax increase was "much too high".

Hoteliers and tourist chiefs have been up in arms over the measure, which would have seen the hotel tax go from a current €1.50 ($2) to up to €8- and €10 in Paris. They said it would deal a blow to the tourist industry in France, which is the most visited country in the world.

“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.

Other members of the government, including Foreign Minister Laurent Fabius and Economy Minister Arnaud Montebourg also criticised the proposed measure, which was put forward in parliament last Wednesday by the ruling Socialist Party.

France has increased several taxes under President Francois Hollande in a bid to reduce its high public debt, amid anaemic growth and climbing unemployment.

The country attracts 83 million tourists a year. The tourism sector accounts for seven percent of gross domestic product, with annual spending by foreign tourists amounting to €36 billion ($49 billion).

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