Scottish councils to be given more powers over tourist taxes

The Scottish Government has published new legislation which will allow local authorities to introduce alternatives to the percentage system that is currently in place.

Edinburgh is set to become the first part of Scotland to introduce a tourist tax of 5 per cent this summer. Glasgow is expected to introduce the tax next year.

However the Visitor Levy (Amendment) (Scotland) Bill will allow councils to set a fixed rate rather than a percentage. If the bill is passed, it will also allow councils to set a range of rates, accounting for things such as geography, times of the year and types of accommodation.

Public Finance Minister Ivan McKee said: “When we introduced the original visitor levy legislation, we wanted to empower councils to implement a scheme that was right for their areas and easy to understand for local businesses.

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“We worked closely with councils and tourism bodies when the original legislation was considered and passed by parliament.

“These new proposals will give councils even more flexibility and provide clarity to businesses.

“We want to ensure visitor levies are an effective option for councils who choose to introduce them to boost investment in local economies and services.”

The government added the bill also clarifies how accommodation providers should report to councils and how taxes are applied to sales made through third parties such as travel agents.

Each local authority can decide whether or not to introduce such a levy, and at what rate to set it at. Any funds raised from a visitor levy will go back to the local authority who can reinvest it in tourism services.

The move has been welcomed by tourism groups who had campaigned against the introduction of a percentage-based visitor levy.

Fiona Campbell, vice-chair of the Scottish Tourism Alliance’s policy group and chief executive of the Association of Scotland’s Self-Caterers, said: “The commitment to introduce much-needed legislative changes in the current parliamentary timetable is an important recognition of the urgency of the situation and the continuing complexities that a percentage-based model presents for Scotland’s valuable accommodation sector.

“This is a pragmatic change that industry has pushed hard for, and it also reflects a clear cross-party desire to ensure the visitor levy is fit for purpose, proportionate and workable in practice.

“We are heartened that the Scottish Government has listened to consistent, evidence-based concerns.”

She added the industry will “work constructively” with the Scottish Government and MSPs from all parties as this bill progresses through parliament, saying they hope any changes to the levy will boost investment in local areas and support the tourism economy.

Ms Campbell said: “Given that change is coming, the sector would encourage local authorities, including those who have already formally consulted on a percentage-based levy, to seriously consider opting for a simpler, more workable fixed amount charge, which will have a less damaging impact on the accommodation businesses that are the lifeblood of our local communities.”