SCOTTISH councils are set to be given the powers to implement a tourist tax on visitors to their area.

On Thursday, the Scottish Government introduced the Visitor Levy (Scotland) Bill to Holyrood, setting out the plans for the scheme.

We told how the flexibility it gives councils to set the rate for the levy has been hailed by Cosla.

But what is a tourist tax, and what will the one in Scotland look like?

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What is a tourist tax?

The 36-page bill sets out a variety of parameters for what the tourist tax, or visitor levy, will look like. It does not set out a limit on the percentage that councils can charge visitors coming to Scottish cities and towns, and will allow authorities to set this themselves.

Essentially, it charges tourists a percentage of their accommodation costs to support local services. 

The tourist tax will apply to hotels, hostels, guest houses, B&Bs, self catering accommodation, camping sites and caravan parks, as well as boat moorings and berthings. It also covers accommodation “in a vehicle or on board a vessel” which is permanently or mostly housed in one place, and any other place where a room or accommodation is offered that is not the visitor's “only or usual place of residence”.

Tourist levies are already in place in many countries across the world including France, Germany and New Zealand, but would be a UK first when introduced.

How much will it cost tourists?

A £2 per night tax for those visiting Edinburgh has been suggested, but as we told above the final rate will be up to each individual local authority. They will set a percentage rate for the levy to be added to accommodation invoices, and tourists will be provided with a breakdown of how much tax they have to pay. Asked if there would be a limit set on how high councils could put this percentage rate, public finance minister Tom Arthur said: “The bill as introduced does not set a limit.”

What will councils be able to spend the money raised on?

Councils will be given autonomy and flexibility to decide on how to spend the money raised from the tourist tax, but all funds raised must be reinvested into the local community, on facilities and services used by visitors, benefitting the local area and economy, and enhancing the tourist experience. There is a bit of a debate about whether or not this could be expanded to include litter collection or road management.

“The legislation as set out creates a wide scope for facilities and services which support the visitor economy,” Arthur said, when asked if litter would count.

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“So decisions around the implementation of the visitor levy on decisions around how that revenue is used will have to be consistent with the legislation.

“This will be a local power, it will be a discretionary power for councils and they will ultimately be the ones who have to determine whether or not to administer it,” he added.

The plans are part of the New Deal for Local Government, which aims to give local authorities more financial flexibility.

When will we see the first tax introduced?

With the legislation still to go through the normal stages of scrutiny in Holyrood, and with lengthy consultations with local communities and businesses to follow, Arthur said it would still be a few years until Scotland sees its first tourist tax.

He told The National: “It would not be until the first half of 2026, that’s what we’re anticipating. “Of course that timescale will be a subject to the parliamentary process, which is a matter for parliament.”