EU eyes higher fees on US, British tourists to repay post-Covid debts

BRUSSELS — British and American tourists could pay higher fees to enter the EU under a plan to boost the bloc’s tax revenues.

The EU is considering taxing foreign travelers to pay back part of the €350 billion common debt that was issued to finance its recovery from the Covid-19 pandemic in 2021.

The potential new levy would be a particular hit to British tourists who already face longer passport queues and more restrictions to enter Europe as a result of Brexit.

The move may also stymie the recent post-Brexit thaw between London and Brussels, which has seen the EU offer smoother passport controls and less red tape for British travelers.

Nevertheless, raising the EU’s entry fee above the currently proposed €7 fee that comes as part of the bloc’s new European Travel Information and Authorisation System, or ETIAS, scheme is emerging as one of the most popular tax options ahead of the European Commission’s formal budget proposal on July 16, several diplomats told POLITICO.

ETIAS is set to apply to 60 countries that have visa-free agreements with the EU, including the U.S. and U.K., from the last quarter of 2026 onward. Any further increase in the fee would similarly apply to the same cohort of countries.

“It seems that there is a possibility of a gradual increase of the fee, strengthening the long-term revenue potential,” the Polish rotating Council presidency wrote in an internal note seen by POLITICO.

A Commission spokesperson told POLITICO “a possible adjustment of the fee” is being considered to factor in the rise in inflation since the €7 levy was adopted in 2018.

While the idea is politically an easy sell, it would likely generate less than a €1 billion per year — a drop in the ocean compared to the EU’s annual debt repayments of €25 billion to €30 billion that will start in 2028.

Another popular option being floated to raise revenue involves levying a €2 fee on billions of imported small parcels from Chinese retailers such as Shein and Temu. The idea, outlined in a Commission paper seen by POLITICO, was endorsed by EU Trade Commissioner Maroš Šefčovič earlier this week.

Tax options

Faced with looming debt repayments, EU countries on Thursday discussed a variety of additional levies including those on digital and crypto firms, airline companies or the profits of multinationals.

While these options would generate higher revenues than a traveler tax, they face stronger opposition as income and business taxes are usually levied at the national level. Besides, critics fear that raising wealth taxes would put off investors from Europe.  

Another popular option being floated to raise revenue involves levying a €2 fee on billions of imported small parcels from Chinese retailers such as Shein and Temu. | Hannibal Hanschke/EFE via EPA

“If these new own resources are additional taxes on business … or taxes on aviation, it’s not the way to do competitiveness in Europe,” said Matthieu Louvot, the executive vice president of Airbus, during a conference on the EU budget earlier this week.  

Raising the EU’s entry fee is appealing because at €7 it is among the lowest in the world and the revenue is currently not being levied by states. To compare, the U.S. charges $21 to EU travelers, whereas the U.K. levies £16.

The Commission estimates the tax will impact up to 50.5 million travelers in 2027, but it did not forecast the revenue it expects to generate.

“ETIAS makes sense. You get into the European Union as a bloc, you need to pay something,” said Pascal Saint-Amans, a tax expert and former Organization for Economic Cooperation and Development official, during the budget conference.

Germany has criticized the move in the closed-doors meeting on Thursday, arguing that it could disincentivize travel to Europe, according to two EU diplomats.