Prague 1 Wants to Increase the Tourist Tax

The Prague 1 district is preparing to negotiate with Prague’s city leadership to increase the tourist tax.

Currently, the law sets the maximum fee at 50 CZK (approximately €2) per person per night, but local officials believe this amount is inadequate.

The last increase in tourist tax came in 2021 when it rose from 21 CZK to 50 CZK per night due to a change in legislation. However, officials argue that this rate is still too low compared to other European cities.

Why the Current Fee Falls Short

According to a report from the district’s Finance Committee, in collaboration with Prague City Tourism, the average residence fee in EU cities is around €7 per night. This is three times higher than the current limit in Prague.

Representatives believe aligning with European standards will not only generate more income but also streamline fee collection, which is a key revenue source for Prague 1.

“This fee helps offset the costs of tourism. Visitors create waste, use local public transport, roads, and other services, all of which impact the city’s budget. Increasing the fee will provide more resources for maintaining cleanliness and improving city services,” said Giancarlo Lamberti (TOP 09), chairman of the Finance Committee and the proposal’s author.

Aligning with European Capitals

Deputy Mayor for Finance, Tomáš Heres (ODS), emphasized the need for an updated fee structure: “The current rate is no longer competitive with other European capitals. This fee plays a vital role in our district’s budget, especially as expenditure pressures rise. We must explore new revenue streams to maintain high service standards for our citizens and ensure continued investment in Prague 1.”

The district has already begun discussions with other authorities to not only raise the maximum rate but also consider a flexible fee system that would allow different districts to set their own limits. This flexibility would help address local conditions, although no district would be permitted to exceed the national legal cap.

Revenue Distribution Issues

Prague 1 officials are also unhappy with how the revenue from accommodation fees is split. Currently, all hotel-related fees go to the city’s central budget, while Prague 1 only collects fees from hostels and boarding houses, of which 25% must be handed over to the municipality. District officials want to either keep the entire amount or see 25% of hotel fees returned from the municipality.

“The proposed increase is crucial, especially given the strain tourism places on the city center. Tourists should contribute fairly to the cost of public services,” said Mayor Terezie Radoměřská (TOP 09).

Karel Grabein Procházka (ANO), Councilor for Regional Development, added, “This fee is vital for the sustainable development of our district. A higher rate will allow us to better manage tourism and ensure Prague 1 remains not just a tourist destination, but a livable community.”

In 2023, Prague collected 801 million CZK in residence fees, a year-on-year increase of 250 million CZK.

Of this amount, Prague 1 generated 262 million CZK. Additionally, the district itself collected 22 million CZK but was required to give 25% back to the central budget, explained Deputy Mayor David Bodeček (Independent/Pirates).

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