Tourist Tax legislation clears first hurdle

Legislation which would give councils the power to introduce a visitor levy to raise funding for local tourism facilities and services has passed its first vote in Parliament.

MSPs have voted to endorse the general principles of the Visitor Levy (Scotland) Bill, which would enable councils to apply a levy on overnight stays in line with many tourist destinations across Europe. All money raised would be reinvested in facilities and services that are substantially used by visitors, benefitting tourists and local economies.

The proposals were backed in a Scotland-wide consultation led by the Scottish Government. Should they wish to use the powers, councils would be required to consult local communities, businesses and tourism organisations on whether a visitor levy should be brought in and how any revenue should be spent.

Representatives from the tourism industry, COSLA, the Scottish Government and other partners have formed an expert group to consider how the legislation could be best implemented if passed.

Speaking after the Stage One vote in Parliament, 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.”

Having passed Stage One, the Visitor Levy (Scotland) Bill will be considered for line-by-line amendments by the Local Government, Housing and Planning Committee before Stage Three when the full Parliament considers further amendments and makes a final vote on whether or not to pass the Bill.

If passed, the legislation will give local authorities the power to introduce a visitor levy in all or parts of their area. The levy would be a percentage of the overnight accommodation cost, with the rate set by the local council.

The levy would be collected by the accommodation providers and remitted to the relevant local authority. It would apply to almost all types of overnight accommodation, including hotels, self-catering accommodation and campsites.

Of the 27 European Union member states, 21 charge occupancy taxes.