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Tourist tax gains support from Holyrood MSPs

By Rachel Smart

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Ariane Burgess, Inverness City Centre
Ariane Burgess, Inverness City Centre

MSPs on a Holyrood committee have backed calls for the introduction of a visitor levy in local authorities, and have said that it would be 'unlikely' to deter tourists.

Also known as the tourist tax, the legislation would allow councils to introduce an overnight accommodation levy – which Highland Council has been in support of.

Publishing its stage one report, the parliament’s local government, housing and planning committee said that it was “unlikely that the introduction of a levy in certain local authority areas, assuming a relatively modest rate, would have a deterrent effect on visitor numbers and therefore on the visitor economy in Scotland”.

Committee convener and Highlands and Islands MSP Ariane Burgess said: “In supporting the visitor levy bill at stage one, a majority of the members of the committee recognise its potential to positively impact Scotland's tourism sector.

"After thorough consultation and consideration, most members of the committee have supported the core principles of the legislation, emphasising that a well-designed levy, at a modest rate, shouldn't discourage visitors and should bring benefits for the tourism sector.

"A majority of the members of the committee welcomed and support the flexibility provided by the bill, which will enable local authorities to customise the levy's implementation meaning that local levies are designed to suit local circumstances."

The committee recognised business concerns around the timing of the legislation, following the impact of Covid on Scotland’s tourism sector and the increased costs of doing business, as well as recent changes to short-term lets licensing.

The report said the committee was “mindful of the concerns of accommodation providers that the introduction of a levy could result in an additional administrative burden” and welcomed the bill’s requirements to implement localised monitoring and reporting to ensure transparency and accountability.

Looking at whether any levy should be a flat or percentage rate, the committee considered this was “perhaps the most difficult aspect of the bill in terms of determining what the right approach should be” and invited the Scottish Government to undertake further work to find a suitable solution.

The majority of members agreed that “meaningful consultation with the tourism and accommodation sector to create a genuine sense of partnership working” would “help alleviate the concerns of many in the sector” and show that a levy should bring “long-term benefits” by improving the experience of visitors to areas where a levy is applied.

The earliest date a visitor levy could be applied by local authorities is 2026, which is considered to provide enough time for any “outstanding issues to be resolved through engagement and consultation” with businesses and other key stakeholders. However, the committee invited the Scottish Government to respond to suggestions from some councils that they should be able to introduce a levy sooner than 2026.

Ms Burgess added: "Understanding concerns from businesses and being mindful of possible administrative burdens, a majority of members of the committee believe that industry worries can be resolved through constructive engagement and consultation at the local level, ahead of any levy being introduced in 2026.

"For the majority of the members of the committee, the visitor levy bill has the potential to be a positive force for the tourism sector, and thank the individuals, organisations and other stakeholders who provided evidence to inform this report.”

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