Bill approved

Tourist tax ‘can be force for good’ says minister

Tourism in Edinburgh
Tourists will pay a levy for accommodation (pic: Terry Murden)

A new visitor levy, or tourist tax, passed a crucial test after MSPs backed a bill that would allow local councils to raise extra income.

The general principles of the Visitor Levy (Scotland) Bill was approved by 86 votes to 30 and, once the law is passed, Edinburgh is expected to be the first local authority area in the UK to introduce it on overnight accommodation.

MSPs were told that a tourist tax is already in place in 21 of the 27 EU countries. Paris, Berlin and Nice are among cities that charge tourists the additional fee.

Speaking after the vote, 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.”

He said the Government had listened to objections and calls to amend the proposals and had made a number of concessions.

It will consider calls from industry for the levy to be a flat rate fee rather than a percentage of the accommodation cost which will apply to those staying in hotels, hostels, bed and breakfasts, self-catering accommodation, campsites and caravan parks. Wild campers and people in motorhomes and camper vans who pitch elsewhere will not be liable to pay it.

“The levy will reflect a visitor’s ability to pay and the type of accommodation. However we are aware of calls from the industry and some local authorities to change the basis of charge to a flat rate,” said Mr Arthur.

But he rejected calls from some councils, including Edinburgh, to shorten the 18-month lead-in time for the levy. He said: “I appreciate the desire from those councils who have already undertaken work on a visitor levy to use this new power as soon as possible.

“However, I’m keenly aware of the strong support from the hospitality and tourism industry for the 18-month period as it gives businesses the necessary time to put in place measures to effectively collect the levy.”

He accepted an argument by some councils that the Bill should be amended so the money raised could be invested in services or facilities used by visitors travelling for business purposes as well as those visiting for leisure purposes.

Tory MSP Miles Briggs said his party was concerned about a number of “negative impacts” that needed to be resolved.

Tom Arthur
Tom Arthur: concessions

He referred to legislation on short-term lets and said the Scottish Parliament is developing a reputation for “poorly drafted legislation”.

He noted how the bill took little heed of some of the most vulnerable people in our society – people visiting children or family members in hospital or hospices, as well as people visiting a family member in prison.

“Scottish Conservatives want to see workable solutions embedded in the Bill and it is clear that across Europe exemption schemes are in place. In almost all schemes, children are exempt,” he said, adding that the Conservatives would bring forward a number of amendments at the next stage of the BIll to provide exemptions.

Labour MSP Sarah Boyack welcomed the Bill, but said she hoped there would be careful scrutiny as it progressed through committee to make sure it worked to maximum advantage.

Green MSP Ross Greer said: “Tourism brings money into local economies but councils see very little benefit from that.

“It’s an entirely reasonable principle that the body providing public toilets, bin collections, leisure facilities and all sorts of other services which tourists make use of is able to recoup those costs. It’s only fair that local residents aren’t left picking up the bill.”

The Scottish Government agreed to bring the Bill forward after it was delayed by the Covid pandemic.

Katie Hagmann, spokesperson for the local authority body COSLA, said: 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.”

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