BUSINESS INSIGHT: 3 things Highland Council must do to get tourist tax right
Last week MSPs voted in favour of introducing a tourist tax in Scotland. The Visitor Levy (Scotland) Bill will allow local authorities to add a charge to overnight accommodation. All money raised should be reinvested in facilities and services that are substantially used by visitors, benefitting tourists and local economies.
At the Inverness Chamber of Commerce, we know that many of our members are in favour as it means there will be money to invest in tourist services. The need for more public toilets is top of most people’s lists. However, members working in tourism feel their tax burden is already too high and that this additional tax will lead to price rises that may put visitors off.
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We have sympathy with both viewpoints. Our tourism sector pays VAT at a higher rate than most of Europe and they don’t have the 75 per cent rates relief enjoyed by their English colleagues. But tourism is one of our most important sectors and the infrastructure is creaking in many parts of the Highlands, so surely this extra funding can help rectify that.
Highland Council will now start an 18-month implementation period and we call on them to do a number of things:
• Firstly, to ensure that the collection system is not overly burdensome. To do that they must consult properly with the businesses that will have to do the collection.
• Secondly, they need to ensure that we remain competitive. What if Moray or Aberdeenshire decide not to impose this tax? Will our accommodation providers become uncompetitive?
• Thirdly, the new revenue needs to be spent wisely. As our democratically elected body, Highland Council should ignore the calls to devolve this spending to other groups. But they must establish a strong advisory body of tourism businesses, and their representative bodies, who meet regularly and who help them to make those decisions.
Highland Council should also use their links with the Scottish Government to press for rates relief for our hospitality sector so that our businesses have a level playing field with their colleagues south of the border.
Colin Marr is Inverness Chamber of Commerce’s chief executive.
