Scotland moves forward with plans for controversial 'tourist tax'

26 May 2023 by
Scotland moves forward with plans for controversial 'tourist tax'

Plans to charge tourists a levy on overnight stays in Scotland are moving closer to becoming law.

The Scottish Parliament has formally published a ‘tourist tax' bill that would give councils the power to impose a levy on overnight accommodation, including hotels, self-catering properties and campsites.

The rate would based on a percentage of the cost and set by each individual council.

All money raised would have to be reinvested into facilities and services used by tourists in the local area, subject to a consultation with residents and businesses.

The City of Edinburgh Council proposed adding a £2 per night room charge to visitor stays back in 2019 but has not yet been given the power to do so.

Hospitality and tourism trade bodies have warned introducing a tax could make it more difficult to attract visitors.

UKHospitality Scotland executive director Leon Thompson said: "The introduction of the visitor levy will leave hospitality businesses frustrated that yet another cost is being lumped onto a sector already challenged by record costs.

"Scotland is rightly regarded as one of the world's leading tourist destinations but with a visitor levy and a significantly higher rate of VAT than the rest of Europe, there is a real danger that we become uncompetitive compared to our neighbours."

Marc Crothall, chief executive of the Scottish Tourism Alliance (STA), said the plans had been "contentious" for "a number of years and for many reasons" and accepted they would be implemented within the next three years.

But he welcomed news that any funds raised from the levy would be used to enhance Scotland's tourism economy and said the STA would continue to work with the government on the plans.

"The visitor levy must be viewed as a force for good, rather than being labelled as a ‘tourism tax', which is extremely damaging for Scotland's reputation as a desirable tourist destination to domestic and international visitors," Crothall added.

The Scottish government has invited representatives from the tourism industry and other partners to join an expert group to consider how the bill could best be implemented if passed.

On 1 April, Manchester became the first UK city to impose a £1 visitor charge on overnight stays in city-centre hotels or holiday apartments.

The Welsh government is also pressing ahead with plans for a similar tax, while this week the mayor of St Ives in Cornwall said the council was talking to local businesses about a voluntary levy.

Taxes on overnight tourist stays are also used in 21 out of 27 EU member states.

Image: David Ridley/Shutterstock

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