Capital’s ‘tourist tax plan illegal’

Introducing a so-called tourist tax to the capital would be illegal, according to tourism minister Fergus Ewing.

The City of Edinburgh Council wants to introduce a charge on visitor accommodation. The “transient visitor levy” could raise between £5 million and £10m a year from a charge of between £1 and £2 a night.

No UK city has adopted such a charge, although similar taxes exist in the US, parts of Europe and other major tourist destinations such as Vancouver in Canada.

The council has noted that the tax may require legislation and is investigating its legality.

However, in Holyrood yesterday, Mr Ewing told Edinburgh MSP Marco Biagi that the Scottish Government has “no plans to introduce a bed tax, and there are no existing legal powers for local authorities to levy a local bed tax or tourism tax”.

He said: “A visitor levy could damage the industry’s competitiveness, especially in the current economic circumstances. Price is a key threat to the competitiveness of the UK and, unfortunately, the UK ranks 135th out of 139 for price competitiveness.”