LOCAL authorities across Scotland will have the power to levy a tourist tax, under a bill to be proposed by the Scottish Government.
Announced in the annual Programme for Government which was published on Tuesday, the “Local Visitor Levy” will allow councils to introduce taxes on tourists staying overnight in their areas.
The 36-page document lays out 17 bills which the SNP/Green government will hope to introduce in the 2022-2023 parliamentary session.
Though details are currently thin on the ground, a council will be able to levy a charge on overnight stays in accommodation, applying over the whole or just a part of their authority area.
Nicola Sturgeon told MSPs on Tuesday that the tourist tax would "give local authorities additional fiscal flexibility". She added: "This will help councils, if they so choose, to fund activities related to tourism and related infrastructure."
Under the Scotland Act, the parliament at Holyrood has the devolved power to create whichever local taxes it may choose.
The funds will be kept by the local authorities which will help fund local services and activities.
In 2021, the then SNP-controlled Edinburgh City Council considered introducing a £2 tax per visitor per night. It was estimated that this could raise around £11 million per year.
The party pledged again to bring in such a tax ahead of the local elections in May 2022. However, the fall-out from that vote saw Labour lean on Tory and LibDem votes to take power over the capital's council.
After the Programme for Government announcement, Cammy Day, Edinburgh's council leader, said: “We believe it’s right to ask visitors to make a small contribution to help us sustain and improve our tourism offer while managing its impact."
“Ultimately the income this generates will help us continue to invest in and manage the success of tourism on our city, making sure we continue to offer one of the most enviable and enjoyable visitor experiences in the world – while bringing new and additional benefits to our residents who live and work here all year round.”
A study in 2018 suggested that a tourist tax would not deter the vast majority of people from visiting Edinburgh.
Speaking to The Sunday National in August, the head of policy and research at the Common Weal think tank, Craig Dalzell, said that tourist taxes are “almost ubiquitous” in some European nations.
He highlighted how they are used to shift the tax burden from the local population onto visitors, saying that some areas use the funding for public transport, and gift visitors a travel pass to use during their stay in return.
The local tourist levy was one of the proposals, such as a change to council tax or a whisky levy, which were put forward as possible ways which the Scottish Government could raise funds to tackle the cost-of-living crisis without overstepping its devolved powers.
The tourist tax proposal was first put forward four years ago, with delays following the onset of the Covid lockdowns.
The general secretary of the Scottish Trades Union Congress, Roz Foyer, said a tourist tax would be a "step in the right direction".
She said: “When used, the powers of our Parliament can bring positive change. This must now extend to Scotland’s tax powers.
"There are constraints but it simply isn’t true that Scotland has a finite budget. The Scottish Government could raise millions from income, wealth and business taxes. The Local Visitor Levy is a step in the right direction in this regard."
