It is estimated that a 1 per cent tax on hotel guests would raise about €12 million each year for Dublin. Photograph: Dara Mac Dónaill A proposed hotel tax is creating divisions between senior Fine Gael Ministers and some party TDs and councillors in Dublin. The four Dublin local authorities have been working on a joint plan to introduce a 1 per cent levy on hotel guests, which would provide them with an independent income stream. It is estimated that such a tax would raise about €12 million each year for the capital. The plan has been strongly opposed by Fine Gael Ministers, including Minister for Enterprise and Tourism Peter Burke and Minister for Arts and Culture Patrick O’Donovan, as well the Irish Hotels Federation. READ MORE However, there is strong support for such a tax among some of the party’s backbench TDs and councillors in the capital, who argue it would allow local authorities to raise money independently for vital investment. They say a hotel tax is applied in most European Union member states. Some party representatives reacted strongly to media reports over the weekend suggesting that the Government plans to block the tax due to strong Opposition from Mr Burke, Mr O’Donovan and other Ministers, including Kerry-based Minister of State Michael Healy-Rae. In a social media post, Dublin city councillor Ray McAdam said the response of his senior Fine Gael Government colleagues was disappointing. “I thought more of my party colleagues than this. Accepting the line of the permanent government all the time has consequences,” he wrote. Dún Laoghaire councillor Jim O’Leary agreed, saying: “Our party has an allergy to local government autonomy. It’s almost like they don’t trust us.” Mr McAdam later said he believed a modest hotel bedroom levy was a fair and practical way to ensure visitors help to support the services and infrastructure they enjoy. “Many capital cities across Europe, including Amsterdam, Paris and Rome, for example, already do this, and it’s time Dublin had the same tools,” he said. “This measure would give Dublin City Council greater autonomy to invest in our streets, public spaces and cultural heritage – easing the burden on residents and supporting sustainable tourism into the future.” [ Tax on hotel guests planned by four Dublin councilsOpens in new window ] Mr O’Leary said: “Local authorities need access to independent sources of income to fund discretionary expenditure. Each council should be able to determine its own rate based on local tourism circumstances.” He said marginal hotel taxes would have “little if no impact on travel decisions”. The councillors’ view was supported by three Dublin-based Fine Gael TDs. Dublin Bay North Deputy Naoise Ó Muirí said the taskforce for Dublin had recommended such a tax and it was essential for the full implementation of the taskforce report. “Nearly every European capital has it,” he added. Dublin Bay South TD James Geoghegan said he was in favour of a modest tourist levy in Dublin city centre “provided any revenue was “ring-fenced for projects that make the city cleaner, safer and better to live and work in”. “We’re talking about a couple of euro on a hotel bill, similar to what’s already working in cities like Edinburgh,” he said. “If we want a capital city that works for the people who live here, work here and visit here, then we need serious investment.” Dún Laoghaire TD Barry Ward also said he favoured such a tax, arguing it was modest common practice in Europe and would provide a revenue stream for local authorities. A spokeswoman for Mr Burke said that as Minister for Tourism he believes Ireland needs to keep a focus on the “value proposition” of hotels and accommodation. Mr O’Donovan last week said the last thing Ireland needed was to be adding costs to hotel rooms. “Just because something is done in another European country doesn’t mean it has to be done here.”