The Cabinet has agreed not to oppose proposals for local authorities to collect a tourist tax despite reservations from hoteliers.
Minister for Housing James Browne has said he has no problem with local authorities being allowed to introduce a visitor levy on paid overnight accommodation within their area.
The Seanad is to debate a motion tomorrow from Fianna Fáil senators calling for the introduction of such a levy, with Cabinet earlier agreeing not to oppose the motion.
Primary legislation would be required to enable the introduction of a visitor charge as neither central Government nor local authorities currently have the powers to levy overnight stays or visitors.
The motion before the Seanad states that many Eurpoean countries such as Italy, Latvia and Scotland have successfully introduced visitor levies, empowering municipalities to raise funding locally and reinvest it in infrastructure, tourism facilities and public services.
It also states how policy discussions at Dublin City Council, and in Ireland more generally, have identified the need for innovative and locally controlled funding mechanisms, including visitor levies.
Should legislation be brought forward and enacted, county and city councillors would be allowed to determine whether to introduce a tourist tax; the rate and structure of such a levy and the geographic scope of its application.
James Browne said he has no problem with councils introducing the levy
It is believed plans for a tourist tax are also backed by the Local Democracy Taskforce established by Minister Browne last year to examine new sources of income for local authorities.
The taskforce is due to report to the Government in the coming weeks.
It is unclear whether there is support across the Coalition benches for the implementation of such a levy, with some ministers concerned at the potential impact on tourism.
However, there was agreement at Cabinet that the proposal at least merited some consideration.
Speaking in the Dáil in April, Minister for Enterprise and Tourism Peter Burke said: “The introduction of a levy needs careful consideration, given the importance of inbound international tourism to Ireland’s economy, regionally and nationally.
“Any visitor accommodation levy would have to take account of many issues, including who will be liable to pay it; for example, whether its application would be limited to international visitors or extended to all visitors, including domestic visitors and how the levy would be collected,” he noted.
Fianna Fáil’s parliamentary party recently backed a motion from Dublin North-West TD Paul McAuliffe calling for an accommodation levy in the capital, with Mr McAuliffe arguing such a charge could gather up to €17.5 million a year.
The Irish Hotels Federation has argued a tourist tax would make Ireland less attractive as a destination.