STA responds to Highland Council’s plans to draw up proposals for a tourist tax
The STA is severely disappointed but not surprised that Highland Council has voted to explore the idea of a tourist tax in more detail and start drawing up plans for what the implementation might look like, given the variations in support for the tax in its consultation.
The evidence gleaned by the Council in its consultation exercise accounts for only a small percentage of businesses who have come out in two recent surveys conducted by our colleagues at the Federation of Small Businesses as being overwhelmingly against the proposal of a tourist tax on the basis of this being damaging to businesses and local economies.
The Council has also disregarded the advice, views and insights of three Chambers of Commerce – Inverness, Caithness and Fort William and five other business groups who strongly oppose the introduction of a tourist tax on the basis of the significant harm it would have on the tourism economy, especially at a time when Highland tourism is not as ‘booming’ as previously reported.
The consultation report makes no mention of the fact that a tourist tax would be introduced in the context of the UK having one of the highest rates of VAT in the world and even states that there are ‘no risks’, when in reality, the introduction of a tourist tax would have widespread, far reaching implications and negative impacts on the sector and local economies.
One of the most apparent risks, according to the report’s data, is that of those who indicated that a TVL would influence their future behaviour, 52.3% indicated that a tourist tax would influence their decision to ‘go elsewhere’ which in line with the numbers in the report, could mean that the Highlands loses 45,000 visitors and around £16 million in visitor spend a year which is significantly higher than the £5 – £10 million the Council would see a tourist tax generating.
Tourism businesses are finding it increasingly challenging to remain profitable in a climate of rising costs with the majority of these businesses facing a recruitment crisis due to the current Brexit situation and loss of available labour, especially from EU member states. It is becoming increasingly difficult for tourism business to operate, recruit and maintain a tourism product that is attractive and competitive in today’s marketplace. The introduction of a tourist tax will invariably add to the administrative costs of those businesses and place Scotland’s tourism industry at a competitive disadvantage at a time when the outlook for the sector remains fragile with continuing challenges and unknowns.
Further engagement with the industry, business groups and sectoral associations must be a priority for Highland Council in light of today’s decision.
As the Council has acknowledged, future proposals around the mechanism of collecting a tourist tax and the use of the tax remains dependent on the Scottish Governments consultation and legislations.
