EDINBURGH will become the first city in Scotland to introduce a "tourist tax" as early as April next year, if plans for a £1.5 billion City Deal is given the go-ahead.
It is thought the capital - which attracts around 4 million visitors a year - could charge travellers up to £2 per hotel room each night in a move that would raise £10m for the city.
The term “transient visitor levy”, or TVL, is being used as the name for the charge being considered Edinburgh, a duty which could be added to restaurant as well as hotel bills.
If approved, the money raised would be ring-fenced for cultural projects.
Council leader Andrew Burns told how he was was optimistic the City Deal - which also includes Fife, West Lothian East Lothian, Midlothian and Scottish Borders councils - could be ratified in March and may include the new taxation power.
It is understood agreement of the Scottish and UK Governments pose the only significant barrier to introducing a tourist tax with the majority of Edinburgh councillors in favour of backing the plan.
Councillor Burns said he was "very strongly" supportive of the charging visitors a small sum which would help strengthen the city's cultural offering.
“I don’t think it would put people off coming here, personally," he said. “In the current climate it would alleviate huge pressure on us - our festivals and events go from strength to strength, but we cannot rest on our laurels, we are being chased by loads of other big cities that have significant events and Edinburgh cannot just assume it will have the pre-eminent position it’s got at the moment, and that requires money.
“A modest levy, or transient visitor levy, would provide several millions of pounds every single year that would be re-invested back into the cultural offering.”
Last week, it emerged that Edinburgh's Christmas and Hogmanay festivals face being dramatically scaled back after city council chiefs decided to slash their backing for the events. . The three-day Hogmanay festival faces losing up to 50 per cent of its £1m budget due to a cut in its current subsidy and a demand to foot policing and licensing costs.
This may lead to the capacity of its street party being cut from 75,000 while Edinburgh’s Christmas festival was reported stripped of public funding for the first time since official events were staged in 1999.
Just this week former SNP minister Kenny MacAskill said the “time has come” to introduce a nightly tourist levy, an idea also backed by Labour.
Fergus Linehan, director of the Edinburgh International Festival, has backed the concept, as has John Donnelly, chief executive of Marketing Edinburgh and Councillor Richard Lewis, culture convenor.
Aberdeen City Council also wants to install a charge, while Glasgow has investigated it as a local taxation option.
The new power would need to be approved at Westminster and Holyrood.
Cllr Burns said: "The reluctance to date has been at Government, not just the SNP but the previous Labour/Liberal Democrat government.
“But I think the reluctance has always been about ‘Well if Edinburgh goes first, if Glasgow goes first, it will have a negative impact on that specific city’ but I think there might be given powers to have it in Edinburgh.”
A Scottish Government spokesman said: “The Scottish Government has no plans to implement any new taxes on the tourism sector.”
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