Tourism tax: messages from the national discussion

High-level summary of the messages that emerged from our national discussion on tourist taxes, and summaries from roundtable discussions.

1. Overview of the National Discussion


1. In recent months, the Scottish Government has engaged with a range of partners and stakeholders from the tourism industry, Local Authorities and the wider business community in Scotland to take forward a national discussion on transient visitor taxes (also known as tourist taxes). The national discussion ran between 23rd November 2018 and 25th January 2019.

2. During the national discussion, the Scottish Government convened a series of roundtable events across Scotland, involving a number of representatives of national and regional stakeholder organisations, Local Authorities and individual businesses. A number of stakeholders and business owners also made written submissions to the national discussion. The Scottish Government wishes to thank all those who participated in the national discussion for their engagement and contributions.

3. As part of the national discussion, the Scottish Government committed to publishing readouts of the roundtable sessions, and any written contributions received, subject to permission being granted from the group or individual submitting the contribution. This paper provides a high-level summary of the messages that emerged from the national discussion. The paper also includes anonymised summaries from each roundtable discussion, which are attached as Annexes A – F.

4. A document containing written contributions to the national discussion will also be published separately, containing the full set of written submissions where contributors have given permission for their publication. Over 130 individual written contributions were received from a range of stakeholders, including business representative organisations, individual business owners, local authorities, and interested third parties. These submissions are a substantial evidence base, and this document has aimed to reflect broad, high-level messages emerging from them. The written submissions will help inform the development of the Scottish Government’s formal consultation proposition.

Background to the National Discussion

5. Tourism is a key sector of the Scottish economy, and is a significant provider of economic opportunities across Scotland. The Scottish Government is committed to working with the tourism industry and other partners to support the continued success and sustainable growth of this key sector.

6. In recent years, several Local Authorities in Scotland, along with the Convention of Scottish Local Authorities (CoSLA), have called for the Scottish Government to grant the powers to allow them to levy a tourist tax in their areas, should local circumstances be supportive. However, there has been significant opposition to these proposals from representatives of Scotland’s tourism industry, who have highlighted pressures on competiveness from existing taxes, particularly the rate of VAT applied to accommodation compared against that of other countries, along with increases in wider business costs, and economic uncertainty arising from the UK leaving the EU.

7. The Scottish Government believes that the issue of tourist taxes requires careful consideration involving all interested parties, particularly in light of the economic uncertainty created by the UK leaving the EU. There is also a significant national element to such considerations, given tourism’s status as a key sector of Scotland’s economy, and because new powers for Local Authorities would require legislation by the Scottish Parliament.

8. In response to these issues, the Scottish Government worked with partners, particularly the Scottish Tourism Alliance (STA) and CoSLA, to take forward a national discussion on transient visitor (tourist) taxes in Scotland. This discussion took place between 23rd November 2018 and 25th January 2019.

Aims and Objectives of the National Discussion

9. During the national discussion, the Scottish Government did not table or test a formal policy proposition on a tourist tax.

10. The national discussion sought to bring partners together to ensure a full range of voices were heard and able to participate in discussions on this complex national issue. It aimed to build a common and shared understanding among our partners of the issues, opportunities and challenges in this area, in the context of supporting the tourism sector’s continued contribution to delivering sustainable and inclusive economic growth in Scotland.

11. The main objectives of the national discussion were to:

  • Seek views on the need for, and purpose of, a tourist tax in Scotland, in the context of current challenges and future opportunities for supporting sustainable and inclusive growth;
  • Encourage debate on available options for addressing underlying challenges and opportunities within Scotland’s tourism sector;
  • Encourage partners and stakeholders to provide and share evidence of potential impacts of tourist taxes on the tourism sector, visitor economy and local government; and,
  • Encourage partners and stakeholders to articulate challenges and issues that would need to be addressed were devolution of a tourist tax power to the local authority level to be considered or taken forward.

The National Discussion Approach

12. In order to take forward the national discussion, the Scottish Government undertook a number of actions.

13. On 23rd November 2018, the Scottish Government published a discussion document, ‘Transient Visitor Taxes in Scotland: Supporting a National Discussion’[1], to coincide with the first roundtable discussion. In keeping with the national discussion, this document did not set out a policy proposition, or make a case for or against a tourist tax, either at Scotland, regional or Local Authority level. Instead the document provided data on the importance of tourism in and across Scotland; evidence on taxes paid by accommodation providers, including comparisons of VAT rates faced by accommodation providers across the European Union; evidence of international experience of tourist taxes; and discussions of potentially relevant issues for the national discussion, based on international experience. The discussion document also set out several broad themes and questions, to help support the national discussion as it went forward.

14. Working with partners, the Scottish Government held six roundtable discussion events across Scotland. Events took place in Perth, Glasgow, Edinburgh, Newton St Boswells, Aberdeen and Inverness, to ensure that stakeholders from across Scotland had the opportunity to contribute, and to help reflect the diverse range of opinions and regional circumstances across Scotland.

15. Each roundtable event was chaired by a Scottish Minister, and featured a range of attendees from the tourism industry, Local Authorities, business representative organisations and other organisations. Both national and local stakeholder representative organisations participated in the round table sessions; individual Local Authorities were represented by officials, while Elected Members from several Local Authorities also participated in the events in Newton St Boswells, Aberdeen and Inverness.

16. The roundtables were guided by the themes and questions presented in the discussion document, and high level, anonymised readouts from each of these sessions are included as Annexes A – F in this document.

17. Following the roundtable discussions, partners and stakeholders were also invited to contribute evidence and views in writing to the Scottish Government. In total, 135 written contributions were received from individuals, tourism sector representatives, business organisations, Local Authorities, and others. Where correspondents have given their consent for their contributions to be published, the written contributions to the national discussion are published alongside, but separate to, this document.

18. The remainder of this document is structured as follows. Section 2 summarises high level messages arising from the national discussion and written evidence on tourist taxes across the broad themes suggested by the national discussion document. Section 3 summarises the document, and Annexes A – F contain anonymised readouts for each of the national discussion roundtable events.



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