The City of Edinburgh Council has launched its formal consultation into a proposed Transient Visitor Levy (TVL) – or tourist tax – in the capital despite First Minister Nicola Sturgeon announcing that a Scottish Government consultation will be held on a national tourist tax.
SLTA members operating in the hospitality and tourism sectors in Edinburgh are encouraged to make their views known while the industry awaits further details for the timescale and nature of the Scotland-wide consultation.
“It is important for our industry to raise awareness on the potentially detrimental impact such a tax could have on our industry,” said the SLTA.
“While a tourism tax/visitor levy may work well for tourism businesses, destinations and local authorities in other global destinations where the level of VAT on tourism services is lower than that of the UK, the idea must be examined within the context of the UK having the second-highest VAT rate in Europe at 20%; the challenges which exist to the imposition of an additional tax; the impact on price-sensitive visitors; and indeed the impact on businesses already coping with the ‘perfect storm’ of rising costs that tourism businesses in Scotland currently face.”
The SLTA continued: “While our current exchange rates are currently favourable for our international markets, this may not persist beyond the short-term and the fact remains that around 60% of Scotland’s tourism spend comes from our already squeezed domestic visitors.
“Any further tax or levy applied could seriously dilute this market.”
The UK is second bottom in the World Economic Forum ranking – 135/136 – when measured solely on international tourism price-competitiveness. This is in stark contrast to its overall ranking of fifth in the world when the full range of international tourism indicators are included.
“This underlines that the introduction of a tourism tax or any such visitor levy would further reduce the competitiveness of our already heavily taxed sector relative to competitor destinations,” the SLTA added.
“Any new tax on tourists or the businesses serving them could ultimately have a potentially devastating long-term impact on Scotland’s tourism industry and local economies which could lead to potential job losses.”