With a bill proposing a visitor levy, the Scottish government has reaffirmed its intentions to follow the lead of global capitals in generating income to be reinvested in a wide range of services and infrastructure.

The Visitor Levy (Scotland) Bill was passed by the Scottish Parliament on 28 May and awaits Royal Assent. Similar to levy frameworks in other major tourism destinations, the bill aims to allow local authorities to apply a levy on overnight stays if they wish to do so. The tax revenue raised will be used by the councils to improve tourism-related services and facilities.

Local authorities will have to consult local communities, businesses and tourism organisations before applying a visitor levy. A minimum 18-month implementation period also provides a timeframe in which local authorities and businesses can work together to design and implement mechanisms for the effective collection of the tax. For this reason, the earliest a visitor levy could be applied in Scotland is spring 2026.

Following Stage 3 amendments, the bill includes:

• tax exemptions for people receiving disability benefits;
• a possible cap on the number of nights to which a visitor levy would apply;
• an obligation on local authorities implementing a levy to establish visitor levy forums to advise on matters related to a levy in their location; and
• a requirement for a review of the bill no later than three years after the first scheme is implemented.

The Convention of Scottish Local Authorities (COSLA) and UKHospitality Scotland are currently working with external partners on statutory guidance for local authorities considering implementing a levy.

One of the main concerns around the visitor levy is its contribution to the already high costs for tourists in Scotland. To safeguard the reputation and accessibility of Scotland as a tourist destination, it is important for the government to cooperate with local businesses and carefully consider the implications of such a charge. Even though it is the visitor who is charged the tax, accommodation providers will have to invest in building reliable systems able to support the management and receipt of levy payments.

When deciding on the implementation of a visitor levy, local councils must promote public discussions to ensure that such a measure does not hinder economic growth and protects the interests of businesses that are at the heart of the local tourism industry. A means to achieve this are the proposed visitor levy forums which allow councils to delve into levy-related information in their area and make informed decisions.

We appreciate the contribution of Vasileios Maniakas in drafting this article.