A VAT cut on accommodation and attractions in seaside towns like Minehead would increase the number of visitors and job opportunities, it is claimed.
The Government has pledged £8.5million to create tourist attractions at seaside towns across the country, including the South-West Coastal Path which starts in Minehead.
It is believed over 700 jobs could be created in repairing and improving the coastal path.
But seaside businesses are urging the Government to reduce the VAT rate on accommodation and attractions from 20% to 5%.
Research handed in at Downing Street last week said the cut would create over 120,000 jobs and add £4billion to GDP each year.
Paul Conibeare, general manager of the West Somerset Railway said: “It would be great news, especially as we have a lot of grade II listed buildings along the railway.
“It would provide some relief on restoring those which would be wonderful not just for railway passengers, but for visitors as well.
“We could use the funds elsewhere and look at becoming a large employer in parts of West Somerset.”
Bryan Leaker, who runs The Parks Guest House in Minehead, said VAT levels are not supporting businesses.
He said: “You have to encourage businesses – if you don’t create a win win position for businesses it’s increasingly onerous.
“They need to change the tax for businesses as a whole so you pay more tax the more you earn. “For example, if your business brings in less than £50,000 you don’t pay any VAT, but then if you bring in up to £60,000 you pay 5% and so on.
“You’d have more people paying tax at a lesser rate.”
West Somerset MP Ian Liddell-Grainger is one of the 80 cross-party MPs supporting the Cut Tourism VAT campaign.
He said: “I have been supporting this for a number of years and really want the Government to get on board with this.
“Many of the hotels and bed and breakfasts, and even some of the other businesses in the area, are summer businesses.
“But Butlin’s, who are supporting the campaign, prove that there is the potential to be successful all year round.
“It’s a no brainer and I believe that, without a shadow of a doubt, the result would be fantastic and businesses would be able to successfully extend their season.”
Coastal communities’ minister Penny Mordaunt visited Minehead last week.
She told the County Gazette she wanted to give more money to coastal communities where possible to help them thrive and provide work for young people.
She asked Mr Liddell-Grainer, Minehead Town Council and key businesses in the town to work on a plan to help Minehead prosper.
Mr Liddell-Grainger added: “Penny is very keen to give money to the town, where and when she can. “It would mean we could enhance the sea front, smarten the town up and maybe think about getting broadband in the high street.
“It would all help to attract more visitors.”