New austerity tax targets the luxury hotel industry

The Negresco Hotel, an icon of Nice, could be hit with new austerity charges

Early this week, French lawmakers rejected plans to increase the VAT on theme park tickets to 19.6 per cent. In its place, conservative politician Jean-Pierre Raffafin announced that luxury hotels should be subject to tax increases of up to 14 per cent, compared to the current 5.5 per cent.

The new austerity measures will target customers wishing to stay in hotels charging between 150 and 300 euros per night.

Anger is mounting amid concerns the tax increase could threaten future employment in the hotel industry by draining hotel funds. Michel Tschann, chairman of the Hotel Trade Union for the Côte d’Azur, called the changes “unjust” and said he doubts they will help improve France’s financial situation: “The government wants to tax everything. When one proposal is rejected, they want to tax something else instead.” Mayor of Nice Christian Estrosi is also “strongly opposed” to the idea. “I do not agree with taxing a sector of the job market that creates such a massive amount of employment. In the Côte d’Azur, 60% of business is created through hotels and 50% of jobs too,” he said.

There are fears the proposed plan will also threaten the tourism industry, driving holidaymakers to choose alternative countries such as Italy or Spain.

Louise Kirby