It was, by any measure, a remarkable coup β a politician pulling off the seemingly impossible by announcing a new tax which the public actually supported. And with its world class attractions β Edinburgh Castle, the Old and New Towns and beyond β tourists would surely still come regardless of the extra expense. At least 16 other local authorities β including Highland Council and Glasgow City Council β are considering following suit, with the former also proposing a 5 per cent levy that would come into force in autumn Many in the tourist trade were equally breathless β albeit for different reasons.
They have pleaded with the council to hold off on its imposing the levy, claiming the scheme has been rushed through and will prove a nightmare for the industry, which has to administer the tax. They suggest it may even be illegal in its present form and could face costly legal challenges before it turns a single penny of revenue. In particular, critics fear that smaller businesses β still reeling from the impacts of Covid, a cost of living crisis, and the Short Term Lettings Licence STLL scheme β will be left drowning in red tape.
Some may simply decide to throw in the towel. People flock from all over the world to take in performances during the city's festivals. We all want a lovely city to visit and work and live in, but the devil is in the detail and when things are rushed through, we are left with serious consequences like businesses shutting down.
It seems absurd to imagine that a tax designed to support tourism might ultimately threaten its future. Tourist taxes are nothing new, of course, but most are a simple flat rate charge on a nightly booking. First, the 5 per cent levy itself is subject to 20 per cent VAT, something unheard of in Europe. Other destinations have a reduced rate of VAT on tourism services, where Scotland does not.
It could mean visitors paying more here than in most other European cities. Anna Morris, who founded The Edinburgh Address in to manage luxury holiday apartments in the Scottish capital, said the levy 'seems quite high'.
