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Cologne's 'culture tax' angers tourism industry

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Hospitality operators and tour operators have reacted angrily to the decision by Cologne City Council in Germany to introduce a "culture tax" with immediate effect.

The council announced that the new tax came into force on 1 October 2010 at the rate of 5 per cent of the gross room rate - the price paid by the guest.

The decision to implement the tax was originally taken on 9 September in a council meeting, but many operators didn't find out about the new tax until last weekend, the first of the new tax regime.

The European Tour Operators Association (ETOA) condemned the council's actions.

"The decision to implement this tax was with just three weeks' notice," the association said in a strongly-worded statement.

"While there had been some speculation that a tax might occur, the hotel and tourism industry has been taken by surprise. Some hotels are - at the time of writing - still becoming aware of this sudden levy."

A spokesperson for ETOA added that significant confusion was caused by the fact that it was unclear who is supposed to pay the new tax, what they are supposed to pay and how they are supposed to pay it.

Tom Jenkins, ETOA's executive director, said: "According to the council, it is a 5 per cent tax on the price paid by the consumer. It is not clear if this "price" is calculated including VAT, or before.

"Nor is it obvious how hotels, who will have to levy this tax, will establish what a client was charged when selling a room through a third party. It also promises to be an administrative nightmare, as hotels will have to collect this money from clients, many of whom will have prepaid.

This is an extraordinary act by Cologne, one which will damage its reputation."

It is thought that the city council is attempting to fill a gap in its coffers - which have taken a battering during the economic downturn - by cashing in on the city's roaring Christmas-tourism trade and the famous Cologne Carnival, which attracts more than one million people to the city in November.

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Hospitality operators and tour operators have reacted angrily to the decision by Cologne City Council in Germany to introduce a "culture tax" with immediate effect.
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