Scottish councils back tourist tax

Scottish local government organisation Cosla is supporting a plan to levy a new tax on visitors.

Some councils, including Edinburgh, have proposed to tax tourists – but the Scottish government said it had no plans to introduce such a scheme.

Cosla argued that if councils were given the power, they would have more control over their finances.

Launching a campaign on the issue, Cosla said a ‘transient visitor tax’ could take several forms and that councils should have the right to do what was best for their local circumstances.

Possible options could include a daily charge on each hotel bedroom or a one-off charge.

The Scottish Tourism Alliance welcomed the Scottish government position that it will not legislate to grant powers to local authorities to introduce a ‘transient visitor tax’ without the full involvement of the tourism industry.

The STA said: “While a tourism tax/visitor levy may work well for tourism businesses, destinations and local authorities in other global destinations where the level of VAT on tourism services is lower than that of the UK, the idea must be examined within the context of: the UK having the second highest VAT rate in Europe at 20%; the challenges which exist to the imposition of an additional tax; the impact on price-sensitive visitors and indeed the impact on businesses already coping with the ‘perfect storm’ of rising costs that tourism businesses in Scotland currently face.

“While the exchange rates are currently favourable for our international markets this may not persist beyond the short-term and the fact remains that around 60% of Scotland’s tourism spend comes from our already squeezed domestic visitors. Any further tax or levy applied could seriously dilute this market.”

Cosla said the money raised could either be reinvested in services that helped tourism or go towards local services generally.

Cosla pesident Alison Evison said: “We want to strengthen local democracy and promote local decision making, starting with giving councils the discretion to introduce a Transient Visitor Tax.”

Councillor Adam McVey, leader of Edinburgh City Council said: “Edinburgh welcomes millions of visitors each year who bring investment, diversity and energy to our city but they also bring a cost in terms of the impact on our core services.

“Our research demonstrates that not only is a levy unlikely to adversely affect Edinburgh’s hotel trade, but that handled correctly, it could help to secure the ongoing sustainability and health of tourism in the city.”

Councillor Margaret Davidson, leader of the Highland Council said: “Tourism is the Highland’s most significant industry with over six million visitors generating over a billion pounds per annum for the Highland economy.

“This can however put significant pressure on public infrastructure and local authorities currently have no mechanism for accessing any of this revenue to invest in infrastructure improvements.

The question of tourist taxes was debated at the Future Global Opportunities for UK Tourism conference in Liverpool.

Panellists during a debate said it was a thorny issue but they highlighted how tourists already generate millions for the UK economy through other taxes such as Air Passenger Duty.

UKinbound’s chief executive Deirdre Wells also said a bed tax would be difficult to collect, especially from accommodation supplied by the likes of Airbnb.

Pictured: City Sightseeing bus in Edinburgh’s New Town © VisitBritain/VisitScotland.