Edinburgh ready to impose tourist tax and here's how tourism would be affected

EDINBURGH - The capital city of Scotland,  Edinburgh is poised to become the first council in the UK to implement a tourist tax, following in the footsteps of other tourist destinations across the world.

The Scottish Government recently introduced the Visitor Levy (Scotland) Bill, outlining the framework for councils to levy such a tax aimed at generating additional revenue to address the city's growing expenses.

The Edinburgh City Council has advocated for the authority to impose a levy on visitors for years to cater to maintaining cleanliness, emptying litter bins, preserving the city's attractiveness, ensuring efficient transportation links, and maintaining the infrastructure, etc.

The Scottish Government has now introduced legislation at Holyrood, allowing councils to impose a visitor levy on overnight accommodations within their jurisdictions if they choose to do so. 

If passed by the members of the parliament, it will give councils the ability to add a tax to overnight accommodation but they will have to first consult multiple stakeholders.

The Edinburgh City Council has expressed its intention to implement such a levy and has initially agreed upon a charge of £2 per person per night, capped at seven nights. Though the final model is yet to be decided, the estimated revenue from this levy ranged from £5 million to £35 million per year.

Despite calls for imposing the tax, the plans will need to be reconsidered as the Scottish Government legislation stipulates that the levy must be a percentage of the overnight accommodation bill rather than a fixed-rate charge; the tax is expected to be imposed from 2026.

Meanwhile, Council leader Cammy Day welcomed this change and stressed that it is fairer for individuals staying in five-star hotels and guests at bed-and-breakfast establishments to pay the same percentage rather than the same amount. Day believes that fixing the rate between two and four percent seems reasonable.

The tourist tax will be applicable to various types of accommodations, including hotels, hostels, guest houses, bed and breakfast establishments, self-catering accommodations, campsites, and caravan parks but gypsy and traveler sites would be exempted.

The government has also clarified that cabins on ferries, sleeper trains, or the rental of campervans will typically not be subject to the levy. Nonetheless, overnight parking of a campervan at a campsite or the mooring of a boat overnight at a boat mooring would be subject to the tax.

The details imply that the accommodation providers will be responsible for collecting the levy from visitors and remitting it to the council regularly but before implementing the tax officially, local authorities would be required to engage in consultations regarding the allocation of the levy's proceeds.

The tourism tax is being imposed across the world in multiple cities. Recently, Manchester became the first UK city to impose a tourist tax and everyone who stays in a city centre hotel or holiday apartment has to pay £1 per night, per room.