Highland cruise trade could be hammered by tourist tax, business groups including Inverness Chamber of Commerce claim
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INTRODUCING a tourist tax could lead to lucrative cruise liner traffic by-passing the Highlands – and even the whole of Scotland – four leading business organisations have warned.
In a joint submission to the Scottish Government’s consultation on a Transient Visitor Levy (TVL), the chambers of commerce for Inverness, Caithness and Lochaber, plus the Cairngorms Business Partnership, raise their concerns on behalf of 1220 business members in the Highlands.
The three chambers of commerce chief executives –Stewart Nicol (Inverness), Trudy Morris (Caithness) and Frazer Coupland (Lochaber) – have previously outlined strong opposition to the levy in a submission to Highland Council.
Mark Tate, chief executive of the Cairngorms Business Partnership, has also now added his voice to the campaign against local authorities being given powers to introduce the levy if they consider it right in their local circumstances.
Highland Council is considering a TVL as a way of raising income to manage the impact of tourism and help it invest in the industry. It estimates a Highland Transient Visitor Levy could generate £5–£10 million each year.
However, the four groups say they are concerned the Highland destinations for cruise liners in Scotland, the Port of Cromarty Firth and Scrabster, will be significantly affected if a TVL is applied to visiting cruise line passengers.
“We believe there is a strong possibility that, in these circumstances, the operators will simply and immediately move to a different destination as has been the experience in Amsterdam," their submission states.
“As well as our region being damaged by cruise liners moving to other Scottish ports, there is always the possibility that they would decide not to visit any port in Scotland at all.”
This would place at risk the £20 million that Scotland's busiest cruise port, Port of Cromarty Firth, estimates that cruise passengers currently contribute directly to the Highland economy.
The chief executives also argue that the addition of VAT to any tourism levy will impose an additional administrative burden on all non-VAT registered businesses, many of them small, rural B&Bs which are an important and iconic element of Highland tourism. They point out this extra layer of tax would also be collected and retained by Westminster and be of no benefit to Scotland’s local authorities.
In addition, they say they have fundamental concerns about the message the imposition of TVL would give to potential visitors by giving a clear statement that it is more expensive than others to visit.
The submission also warms the Scottish Government that by allowing each local authority to decide what is appropriate for their region, rather than introduce a uniform rate nationally, this will further exacerbate the situation.
"We believe that, in addition to influencing where visitors will choose to stay, such an additional layer of complexity to local taxation could deter inward investment to the sector," they write.
“Further, many tourism businesses and accommodation providers operate across local authority boundaries. As such, they face having to deal with differing tax regimes in each of their locations which will impact significantly on efficiency through an increased bureaucratic burden and lost opportunity to benefit from economies of scale.”
The submission recognises the importance of tourism to the Highland economy and acknowledges the challenge Highland Council faces in responding to the infrastructure and service challenges. However, the four groups say they remain strongly opposed to a TVL as a mechanism to address these challenges across Scotland.
“The sector has been under significant cost pressure in recent years, particularly around business rates. Regardless of how the levy is framed, this would act as a further unwelcome tax on this hard-pressed sector,” they warn.
The chambers’ submission also raises concerns that a levy collected on overnight stays would exclude day visitors and camper van users from contributing towards infrastructure and service challenges.
Inverness Chamber chief executive Stewart Nicol said: “The four groups who have signed this submission all have a strong representation from the tourism sector within their memberships.
“We recognise the importance of the tourism sector to Scotland and our region’s economy. Indeed, we would argue that the Highlands plays a significant role in ensuring Scotland is one of the top tourism destinations in a global context.
“That is why we feel this levy would be wrong for our members and our visitors as it would send out a very negative message.”
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