Edinburgh Council and the Scottish Government clash over tourist tax
Edinburgh City Council’s proposed ‘tourist tax’ has been shot down by the Scottish Government, which gave no indication of devolving the power to levy the tax.
Edinburgh is not the only city in the UK proposing the transient visitor levy, or tourist tax, which could bring in up to £10 million a year for the depleted city coffers. But councils are restricted in their powers, and currently do not have the power to implement the tax, which would be added to the price of hotel bookings.
Even a £1 tax added to hotel bills could raise £3 million extra a year in a city like Glasgow, though the tourism industry fears a reduction in visitor numbers. They point to the UK’s already eye watering 20% rate of VAT as an indication that tourists are already overtaxed. Tourism is a key sector in the Scottish economy, amounting to 5% of total GDP, and one out of every 12 jobs is in the industry.
But local government in Scotland badly needs the money. Real term council funding has been cut by almost 10% in the last decade - even as the population has grown and the demand on council services has increased.
Councillor Adam McVey, The leader of the SNP-Labour administration in Ediburgh, supported the move, telling the BBC:
"The number of people coming to Edinburgh is growing consistently year on year.
"This is a fantastic thing for our city, it makes us a vibrant, exciting place to come and visit.
"But it also creates some challenges, some pressure on local services and also on things like the festivals that we need to keep on growing to expand that offer.”
COSLA unanimously backed the idea in February, but despite support from across the political parties, including SNP administrations like Edinburgh, the Scottish Government has remained resolutely lukewarm about the idea. A spokesperson said:
"We have no plans to introduce a visitor levy on the tourism sector, which is already subject to the second highest VAT rates in Europe by the UK government.
"We continue to deliver a fair deal to councils across Scotland, with revenue and capital funding increasing in real terms over the next financial year."