A HOTEL tax in the Capital would boost tourism, create jobs and strengthen the economy, according to former city council leader Donald Anderson.
The idea of a tourist tax – of £1 a night on hotel bills, for example – is controversial, with many in the tourism industry warning it would damage the sector, while supporters argue it would bring in much-needed cash for investment.
The Scottish Government has said it has no plans for such a tax.
But Mr Anderson said it was “a significant gap” in Finance Secretary Derek Mackay’s budget unveiled in the Scottish Parliament last month.
Writing in the Evening News’ sister paper, The Scotsman, Mr Anderson said: “This is a small tax on the visitor. It would create resources that would ensure that our festivals can compete effectively in a tourism market which is the world’s biggest and one of its fastest growing industries.
READ MORE: Donald Anderson: How a tourist tax would help Edinburgh stay great
“There are critics, not least from the hotel trade which rightly points to higher levels of VAT here than in mainland Europe. However, any tourism tax pales into insignificance against the variation of the ‘rack rate’ in modern hotels.
“Anyway, it’s hardly a tax, rather it’s a mechanism to secure future investment.”
He said even if all that a tourist tax achieved was a one per cent increase in hotel occupancy it would easily be justified.
“Nobody likes new taxes, but if we want an economy that grows as well for the next 20 years as it has for the last 20, this looks like a good way to help achieve that.
“Edinburgh’s Christmas, much like the International and Fringe Festivals had very humble beginnings, but it is now one of the most successful events of its kind.
“Our festivals make Edinburgh a better place for its residents and visitors. They’ve ensured that empty shops in the city centre are a rare event these days, and they support and protect jobs of more than one in ten of the population.
“If we want to strengthen one of our most successful industries, create more jobs and build a stronger economy throughout the country, a tourism tax would be a very good place to start.”
Calls for a tourist tax received almost unanimous support from the public attending a council budget question time at the City Chambers in November.
It is estimated a levy could raise up to £15 million a year in Edinburgh which could help fund the festivals and cultural events which attract tourists or pay towards services like street cleaning and road repairs.
The city council had hoped to secure the power to introduce a tourist tax as part of the £1 billion City Deal announced last year, but it was not included.
The British Hospitality Association seized on recent comments by Tourism Secretary Fiona Hyslop as ruling out the idea of a tourist tax. She said the government was not willing to consider a levy unless the hospitality industry was involved from the outset and their long-term interests were fully recognised. But others said that left the door open.