Business groups have hit out at the Burt Inquiry's proposals to introduce a tourism tax in Scotland.
The long-awaited independent review of local taxation in Scotland, released yesterday, recommended introducing a discretionary power for councils to apply a tourism tax.
Sir Peter Burt's two-year long inquiry argued that councils are not benefiting from their investment in local tourism and claimed that tourism taxes work successfully in other countries.
But Gavin Ellis, chair of the British Hospitality's Scotland Committee, said the report failed to acknowledge that New York's tourism tax was felt to be damaging the city's tourism industry, and was withdrawn by Rudolph Giuliani in one of his first actions as mayor.
"Tourism taxes have also been withdrawn in other locations, including Sydney and the Balearic Islands for similar reasons," he said. "This is not a tax that would be in the interests of the Scottish economy."
Alan Rankin, chief executive of the Scottish Tourism Forum, said it would be "disastrous" for Scotland if local authorities were allowed to raise money by taxing tourists.
Fiona Moriarty, director of the Scottish Retail Consortium, added: "Measures which discourage visitors should be avoided at all costs.
"A localised tax is completely unnecessary and will unfairly target tourists who are relatively low users of public services. They already pay airport tax and VAT on most purchases on top of their contribution to the economy."
Grant Hearn, chief executive of Travelodge, which has 22 hotels in Scotland, said he would consider pulling out of the country if a tourism tax was imposed.
By Daniel Thomas