Tourism tax

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I have been following the correspondence in recent days in The Scotsman concerning the case for and against the imposition of some form of tourist or bed tax. Anthony Tucker (Letters, 27 August) is making a case against this proposition which the British Hospitality Association (BHA) fully supports.

BHA has been expressing its strong opposition to calls for tourist taxes (or transient visitor levy) since these were renewed some four years ago.

Professor Kerley (Letters, 26 August) argues for a supplement on business rates or for a tourism business improvement district (TBID). Hospitality businesses already pay high levels of business rates, which are based on their turnover, and hotels contribute significantly to the promotion of a destination through their own, highly effective, marketing activity.

BHA is opposed to business improvement districts for the simple reason that tourism beneficially affects every business – retail, construction, the creative industries and passenger transport to name just four.

Therefore, levies charged to support the promotion of a destination should be borne by all businesses in a district – business improvement districts are therefore a fairer levy than a TBID which would saddle hotels and other tourism businesses with an additional levy.

Professor Kerley cites France as a tourism destination which operates tourist taxes and remains successful. However, France applies a rate of VAT on hotel services of 10 per cent – half of the rate applicable in the UK. Recent analysis by BHA shows that, of 14 European countries which apply some form of tourist tax, all but one levy reduced rates of VAT on hotel services.

In fact, the UK is one of only three EU countries that do not have a reduced rate of VAT for tourism services.

A recent report by the World Economic Forum ranks the UK 140th out of 141 countries in terms of tourism price-competitiveness.

The introduction of a tax on tourists will simply make us less competitive than we already are, working against efforts to increase visitor numbers and revenues and jeopardise the considerable economic contribution which tourism makes through jobs and GVA to the Scottish economy.

Willie Macleod

Executive director

British Hospitality 
Association, Scotland

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