The Italian Government is expected to confirm legislation introducing a bed tax by the end of the year.
The measure will allow cities to charge tourists a daily bed tax of up to €5 per person in 2007.
If approved, Italian towns will be able to choose whether they want to introduce the tax, which would then be added to hotel rates.
Cities may also decide to apply the tax only at certain times of the year and are allowed to exempt particular establishments, like youth hostels.
Unlike the proposals being considered in the UK as part of the Lyons Inquiry into local government funding, revenues from the Italian bed tax will reinvested in the tourism industry, including repairs on churches, monuments and museums in cities that are experiencing budget cuts
Rome, Florence and Venice are expected to sign up for the tax. Other cities, like Naples, are not.
By Daniel Thomas