SLTA Calls On Government To Admit That New ‘Visitor Levy’ Is A ‘Tax’ On Business

The SLTA (Scottish Licensed Trade Association) has said that the Scottish Government should stop calling its forthcoming tourist tax a “visitor levy”, with Colin Wilkinson, the industry group’s managing director, stating: “It’s a tax and not something we support in any way.”

The Visitor Levy (Scotland) Bill, backed by MSPs yesterday, gives councils a new power to introduce a visitor levy that would raise funding for local visitor facilities and services.

While accepting that local authorities will now have the choice to introduce a tourist tax, the SLTA remains sceptical that councils will fully use the extra revenue for its intended purposes. “We have already picked up on some local councillors having the view that this could replace current budget spending,” noted Mr Wilkinson, “so the question remains: will this extra revenue for local councils be truly ringfenced for the purposes it was intend for?

“We already have experience of councils withholding revenue from the liquor licensing regime which was supposed to be cost neutral.

“While there are regulations that allow Scottish Government ministers to intervene when local authorities impose excessive visitor levy charges, and if charges are deemed ‘excessive’ or revenue raised has been misspent, this would be another process to go through for the business community, and no doubt there would also be a lengthy arbitration process to resolve matters.”

He added: “Tom Arthur, the Employment and Investment Minister, points out that ‘21 European countries have some kind of visitor levy’. However, he conveniently fails to mention that our European neighbours do not charge 20% vat on accommodation. Now our visitors requiring accommodation, both foreign and domestic, will have a further tax added on to their accommodation bills and, to add insult to injury, VAT will also be added on to the visitor levy, so it’s a ‘tax on a tax’.

“Let’s also not forget it is not just accommodation providers that benefit from tourism – many other sectors also benefit – but it is the hard-pressed accommodation sector that is being targeted with administering this tax. Our concerns are if this ‘visitor levy’ will have a negative impact on Scotland’s competitiveness in attracting tourists once they fully realise that they already pay 20% VAT, plus a tourist tax of perhaps 7%, and VAT on that.”

Mr Wilkinson stressed the need for the new legislation to be flexible for businesses and to ensure that the licensed hospitality sector is involved in all future discussions with local councils intent on introducing a visitor levy.

“We accepted this week’s decision but, in our view, its introduction is yet another burden on a hard-pressed sector still recovering from the pandemic and navigating current and ongoing costs of doing business.”