Tourist tax campaign gathers support, leaders claim

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The Scottish Government is coming round to the prospect of a “tourist tax” on hotel rooms across the country, council leaders have claimed.

The levy would bring in millions of pounds in revenues and Town Hall chiefs insist it will help meet the soaring costs which comes with the mass influx of visitors which cities like Edinburgh face throughout the year.

Tourists on the Royal Mile.

Tourists on the Royal Mile.

The capital are already consulting on such a scheme which city fathers say could raise £11 million a year with charges of £1-2 per night.

Hospitality industry leaders have been sceptical about the idea, but local authority body Cosla stepped up its plans with the launch of a new report at Edinburgh’s City Arts Centre yesterday.

The Scottish Government has so far rejected calls to introduce the legislation at Holyrood which would be needed to introduce such a measure.

But Cosla’s resources spokeswoman Gail McGregor, an Conservative councillor, revealed she has held talks with Finance Secretary Derek Mackay about the prospect of Transient Visitor Tax (TVT) and claimed his attitude was softening.

“I think he’s a little bit more open-minded than he was before,” Councillor MacGregor said.

She added that Labour and the Liberal Democrats were on board and the Tories were also sympathetic to the idea of councils being able to raise their own revenues.

Such tourists taxes are common in other major European cities like Amsterdam, Brussels and Rome, but Scottish ministers fear that tourists already pay far higher rates of VAT in the UK and an additional tourist tax may drive away visitors and hit the accommodation industry.

Hospitality chiefs have been vocal critics of the plan, but Cosla President Alison Evison said she is aware of the anxieties.

But she added: “No local authority would take an action that would be damaging to their area or local economy.”

She said the money received by councils in the last local government settlement was “not the money that we required” but cash raised by tourist tax would be additional, not a replacement.

She added: “We want to be fiscallly empowered to raise money locally which can then be spent on delivering local priorities. Transient visitor tax represents a key step towards local financial empowerment through local devolution.”

Various options for rates are outlined, including flat rates, a percentage of accommodation or a progressive tax based on star ratings.

A Scottish Government said there are “no plans” to introduce legislation for a tourism tax amid concerns over existing VAT levels.