All eyes in Britain are currently on Finance Minister Rachel Reeves, who is expected to present next Wednesday’s budget for next year, which will include various cuts aimed at reducing the deficit and reducing the kingdom’s debt.
Britain is facing a budget “hole” estimated at at least 30 billion pounds, following increased government spending and weak growth, and the ruling Labor Party is struggling to stay committed to its promise not to raise taxes on the public.
According to the latest reports ahead of Reeves’ speech in Parliament, the Minister of Finance reiterated her intention to raise taxes directly on the middle class, and will try to create a set of measures that will increase the state’s revenues in a way that will reduce the deficit.
One of the measures hinted at in the media is giving large cities in England, such as London, the possibility to impose a new “tourist tax”, which will be charged to those who stay in the capital of the United Kingdom. The Mayor of London, Sadiq Khan, has already welcomed the intention to do so.
The goal of the British Treasury is to “free up” national budgets by raising money directly by London, and according to estimates, a new tourist tax could bring in at least 240 million pounds a year to the city’s coffers. Last year, London was visited by about 89 million tourists.
Scotland already has taxes
The BBC noted in a report on the new initiative that Britain is the only country in the G7 where the laws do not allow large cities in England to impose a tourist tax, in the name of the centralization of the government and a certain limitation of their authority. These restrictions are being changed these days, and Reeves is expected to announce the acceleration of the changes. In Scotland, on the other hand, which is also a member of the United Kingdom, Glasgow and Edinburgh already impose a tax on tourists.
A study commissioned by the city of London, and published in the British media last week, indicates that the city of New York imposes a “tourist tax” of 20 dollars for every night in the city, and thus raises about 645 million dollars a year. Tokyo, on the other hand, imposes a uniform tax, regardless of the number of nights tourists spend in the city, and raises only about 45 million dollars a year. In touristic cities in France and Italy, the tax rate varies depending on the region and the rating of the hotel. The study states that even if the city of London imposes a new tax, “it is not expected to see a decrease in the number of tourists coming to it”.
Reeves’ mission is to calm the markets regarding the British debt, and to act for budgetary restraint, while the yields on British ten-year government bonds are already at a peak of more than a decade. This further increases the cost of British debt repayments, and reduces the possibilities of government spending, at a time when the attempt to fight the cost of living is at the top of the public agenda. GBP), collect taxes on university tuition fees for foreigners studying in the UK, fight tax evasion and other measures. All this, while she is trying to implement Labor’s election promises and increase the pensions eroded by inflation in the Kingdom, as well as remove the existing limits that only give child benefits for up to two children per family.
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