The bill to introduce powers for local authorities to impose a transient visitor levy or tourist tax has passed the first voting stage at The Scottish Parliament.
This is a broad framework for all 32 local authorities to enact in their area in their own way. Each council may or may not charge a tourist tax and can decide how the revenue from it will be spent.
In Edinburgh the council has calculated that around £37 million could be raised from charging either a percentage or a flat rate fee on those staying in hotels and other accommodation. Hotels in Edinburgh noted a 92% occupancy rate over Hogmanay, and this is an important part of the city’s economy.
There is also more information about the proposed tax here.
Public Finance Minister Tom Arthur said: “I strongly believe that a visitor levy can be a force for good, offering councils the opportunity to use the proceeds to invest in their local economy, bringing benefits to residents and visitors alike.
“This Bill is about giving local government a new power, which they can use as appropriate. It fits with our ambition of fiscally empowering local government and strengthening local democracy, and the New Deal for Business and the New Deal for Local Government are at the heart of the Scottish Government’s approach to this measure.
“We have already taken on board the helpful input we have had from business, councils and others and I am committed to continuing that meaningful and constructive engagement as we move forward.”
COSLA’s Resources Spokesperson Councillor Katie Hagmann said: “I am delighted to see the progression of the Visitor Levy Bill through Parliament. The introduction of visitor levy powers is a small but significant step towards maximising the revenue raising powers available to local government, enabling those closest to the community, your democratically elected councillors, the power to decide what works best for their local communities, and recognising the great diversity of needs across Scotland.
“The revenue raised by the levy has the potential to provide much-needed additional investment in our communities, in areas from the natural environment to cultural and leisure facilities, at a time when local government is facing significant strain on resources. Meanwhile, we are keen to ensure that this additional revenue stream helps us to maintain Scotland’s position as a world-leading tourist destination.
“We are fully committed to further joint work with the Scottish Government as the Bill continues its journey through Parliament, as well as continued engagement with colleagues across our important tourism industry.”
Lothians MSP Miles Briggs, Conservative, said: “We are opposed to the SNP-Green Government’s plans to introduce the measures in the Visitor Levy (Scotland) Bill. We believe that the bill could have a significant negative impact on an industry that has suffered, especially during the pandemic. We want to ensure that ministers listen to the concerns that have been raised and do all that they can. I genuinely hope that, in a spirit of consensus, ministers will reach out beyond the parties that support the bill in an effort to ensure that we put things right. I have led many conversations about the exemption schemes in the committee. I want to ensure that that is taken forward.
“Ministers have stated that the purpose of a visitor levy is to generate revenue for local government in order to support and maintain tourism-related infrastructure, services and amenities. However, we are still not clear about how those funds will be ring fenced to help to achieve that. Who will take forward the decision making on where the moneys are spent?
“In the coming weeks, Scottish Conservatives will work to try to limit the damage that the bill might cause our tourism businesses and to improve the bill by making it fairer and limiting its impact on those who might be captured by it, such as people who are visiting loved ones in hospital, young people, those who are on education visits and vulnerable families. I hope that we can work across the Parliament to take that forward to stage 2 and finally to stage 3.”
Scottish Greens welcome the move
Allowing councils to apply a visitor levy will raise vital funds for local services which are often under huge pressure due to tourist numbers, says Scottish Greens finance spokesperson, Ross Greer MSP.
The comments come as The Scottish Parliament prepares to debate Stage 1 of the Visitor Levy (Scotland) Bill, which would empower local councils to introduce a visitor levy to hotels and overnight accommodation, similar to schemes already in place across Europe’s most popular tourist destinations.
The scheme was secured by the Scottish Greens during budget negotiations in 2019 but was one of a number of bills postponed due to the Covid pandemic.
Mr Greer said: “Scotland is incredibly fortunate to be such an attractive tourist destination, but this puts a huge strain on local services ranging from public toilets to bin collections. Tourists obviously don’t pay council tax, so a small levy on their overnight stays is a fair way to ensure that local residents aren’t left picking up the bill.
“Visitor levies are already common across Europe and beyond, including in top destinations like Paris and Barcelona. It is a small charge that will make a big difference here in Scotland.
“This is just one of the steps Scottish Greens are taking in government to give more powers to local communities, alongside the ability to double council tax on holiday homes and the upcoming cruise ship levy.”
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