COUNCILS need to know whether they will be given extra funding from central government to cover the costs of introducing and processing a new tourist levy, a leading professional organisation representing tax experts has warned.
In a written submission to a Scottish Government consultation on proposals to give councils the power to bring in a transient visitor levy, the Chartered Institute of Taxation (CIOT) urged ministers to ensure any costs associated with administering it are included in budget negotiations with council umbrella group the Convention of Scottish Local Authorities (COSLA).
The Institute said clarity was needed to make sure councils would have sufficient funding to carry out work to implement the levy such as compiling a register of eligible properties and extra staff costs.
In its budget deal with the Scottish Greens, needed to secure passage of its spending plans for the next fiscal year, the minority Scottish Government agreed to “consult, in 2019, on the principles of a locally determined tourist tax, prior to introducing legislation to permit local authorities to introduce a transient visitor levy”.
Edinburgh city council want to introduce the levy with a local consultation finding considerable backing among the city’s residents and businesses.
READ MORE: SNH apologises for chemical killing Inchtavannach island's trees
It estimated the scheme could raise between £11.6 million and £14.6m per year if the levy was set at £2 or 2% of the cost of accommodation.
However, bodies representing tourism companies have been opposed to the scheme with the Federation of Small Businesses (FSB) raising concerns the levy could reduce overnight visitor numbers to the city.
In its submission to ministers, the CIOT added that its preference was for the Scottish Government to establish a national framework for operating the levy, providing guidance on how councils should administer the tax.
It said such a framework would make the tax easier to operate across Scotland, reduce burdens on businesses and make it easier for visitors to understand. It would also respect the independence and autonomy of councils to make their own decisions on whether they would choose to implement the tax and the amounts they would charge.
Alexander Garden, chair of the Chartered Institute of Taxation’s Scottish Technical Committee, said: “If councils are going to be given the power to levy taxes on tourists, then we think it is important that they know from the outset how they are going to be expected to pay for its operation. The consultation is silent on where the resources for administering and policing the tax would come from. Theoretically, this could come from existing council budgets, from a proportion of the money raised from the tax or from extra funding from central government.
“A nationally designed framework for operating the tax, providing clear guidelines on how the tax will be designed and what will be taxable, should be relatively straightforward to operate, even if individual councils choose to set different rates.
“But at a time when council budgets are already stretched, the Scottish Government and COSLA need to ensure that the costs of implementing the tax are included as part of future budget negotiations”.
Tourist taxes already operate in many European cities where the money raised is used to help fund local public services. Athens, Paris, Rome and Florence use a “progressive visitor levy” which charges a higher tax for a more expensive hotel room. Rome charges around £7 for a five-star room and £4 for a three-star room.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel