Edinburgh City Council is set to table detailed proposals to the Scottish Government to charge visitors £2 a night in the UK’s first tourist tax.
Despite currently having no legal mechanism for introducing the tourist tax or transient visitor levy, the plans will be turned over to Holyrood ministers, subject to the approval of full council next week.
The tourist tax proposes a flat £2 per night room charge, an exemption for camp sites and a cap of seven consecutive nights. The Scottish Government said it has “no plans at present” to introduce the levy. The charge would apply to “all paid accommodation” across the Capital, including short term lets and hostels.
The council expects to raise around £14.6m a year if the charge is introduced – which would go towards supporting and managing the impacts of tourism on the Capital. It will be down to councillors to decide specifically where the extra revenue is spent.
Despite not being included in the Scottish Government’s draft budget plans, the council is hopeful that opposition parties will include a tourist tax as part of any compromise to get the budget through Holyrood.
Council leader, Cllr Adam McVey said: “The fact that this policy is so well- developed, I think it would be a huge missed opportunity if we didn’t end up with a deal in parliament with the TVL in it.
“We have looked at the detail of what people have said and tried to come up with the best scheme that represents an optimal scenario for Edinburgh.”
Cllr McVey insisted the “chances are high” of opposition parties demanding a tourist tax as part of this year’s Scottish Government budget proposals.
He added: “There’s an opportunity in budget discussions right now. I would encourage parties to vote for a budget that includes a transient visitor levy.
“This policy is on the table now – it’s ready to go, pretty much now.”
In order to mitigate any costs for accommodation providers to set up and collect the charge, it is proposed that 1.5 per cent of raised revenue “be retained” by the providers for the first two years.
Opponents have criticised the proposals amid a challenging financial picture as the council get set to cut £41m of funding from next year’s budget.
Conservative group chair, Cllr Jason Rust, said: “It is concerning that at a time of an appalling budget settlement, while health and social care is in crisis and our roads and our council estate are crumbling, the time of council officers and ultimately council-tax payers’ money has been spent producing a report on a levy which the council does not have the power to introduce.
“While the proposed exemption of camp sites is welcome, any tourist tax would have to be well-designed and operated to ensure businesses are not disadvantaged and I have serious concerns for those within the city boundary which fall outside the main tourist hot-spots.
“There is also no real clarity or direction as to the revenue use which is fundamental to many residents’ acceptance of such a levy.”
A Scottish Government spokesman said: “We have taken forward a national discussion on tourist taxes, as this is a complex national issue and one that provokes strong opinions.
“We have no plans at present to introduce a tourist tax. Any new powers would take legislation and time to get them right from the start. We will continue to engage with industry and local authority partners on this complex national issue.”
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