Paris, New York, and Tokyo Already Have It... The Only G7 City Without a Tourism Tax, London, Considers Introduction

UK Government Officially Moves to Grant Cities Authority to Impose Tourism Tax
Hospitality Industry Warns of "Tax on Top of a Tax" and Potential Decline in Tourism

On the afternoon of the 15th (local time), the first performance of the girl group BLACKPINK's world tour "Deadline" took place, and the audience was seen walking in a line toward Wembley Stadium in London, UK. 2025.8.16 Yonhap News Agency
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London, the only major city among the G7 nations without a tourism tax, is expected to introduce such a tax soon. The UK government is accelerating discussions on the matter as it moves forward with legislation that would grant local governments the authority to impose a tourism tax.

According to BBC on the 23rd (local time), UK Chancellor Rachel Reeves plans to grant each city the authority to introduce a tourism tax through the "Devolution and Local Empowerment Bill." This bill is currently under parliamentary review.

Sadiq Khan, the Mayor of London, who has consistently called for the introduction of a tourism tax, has welcomed the progress of the bill. While Khan's office stated that it would not comment on speculation, it also noted that implementing a tourism tax could have positive effects.

The London city government emphasized, "Much like other global cities, a reasonable level of tourism tax would help revitalize the city's economy and strengthen London's reputation as a world-class destination for tourism and business."

Major G7 cities such as Paris, Munich, Milan, New York, Toronto, and Tokyo already impose some form of tourism tax. Among the UK's local governments, both Scotland and Wales have also recently introduced tourism taxes for overnight guests.

People gathered to watch the Changing of the Guard ceremony in front of Buckingham Palace in London, England. Photo by AFP Yonhap News

However, London has not yet decided which form of tourism tax it will implement. According to a simulation by the London city government based on visitor numbers in 2017, imposing a flat-rate tourism tax of 1 pound per person could generate around 91 million pounds (approximately 175.3 billion won) annually. There is also an analysis suggesting that switching to a 5% tax on accommodation fees could generate about 240 million pounds (approximately 462.1 billion won) in revenue.

The city of London believes that the potential for a decline in tourism demand is low, citing research that tourists visiting popular cities are not particularly sensitive to tourism taxes.

However, the London tourism industry has expressed opposition. Kate Nicholls, Chair of UK Hospitality, which represents the London hotel sector, criticized the proposal, saying, "Value-added tax (VAT) in England, Scotland, and Wales is already at a fairly high level of 20%, and imposing another tax is essentially 'a tax on top of a tax.'"

She added, "Our customers are already paying the highest levels of tax. If taxes prevent people from coming to London, it would be a tax that takes away jobs, growth, and investment."