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Taxing times for tourists

October 31st, 2018 | by Sesha Subramanian
Taxing times for tourists
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News broke out on October 17th that the city of Edinburgh is consulting various stakeholders about imposing a tourism tax on visitors to the city, and if this is a good idea. As of now, the proposal is to either charge 2% or £2 per night to all guests in all forms of accommodation. The tax, called a Transit Visitor Levy (TVL), will be charged all year round but is limited to seven nights. The aim of the consultation is to assess the views of various stakeholders, such as residents and local businesses, about whether it is a good idea. There are also questions about what the additional income, potentially amounting to £11 million, could be used for.

Tourism tax is not a new thing in Europe. It has never been implemented in the United Kingdom but there are many countries within the EU, including France and Italy, who impose the tax either on the country as a whole or within specific areas of the nation. The main reason for imposing tourism taxes in most places, including Edinburgh, is the rising number of visitors that they face. This is a phenomenon called “overtourism”. But is imposing an additional tax the right way to go or is it simply an opportunity to make a little more money?

In the first half of 2018, “there were 6.4 million trips and £2.1 billion spend by international inbounds and GB residents taking overnight visits to Scotland” according to VisitScotland.org. The rise of Scotland becoming a popular tourist destination is not an overnight event. In fact, it is the job of tourism boards and other such organisations countries to project such rises and make sure that the infrastructure can handle the load of transient visitors at any given time.

A bit of extra money won’t deter people from experiencing a new place

Tourism tax can help build that infrastructure and help keep tourism sustainable, providing means for a city to keep up with burgeoning demand. At any rate, a tourist contributes to the local economy by simply visiting places, eating at local restaurants and doing other tourist-y things, so to speak. A little bit of extra money, so long as it is reasonable, is merely a drop in the ocean and is unlikely to deter many people from the experience of a new place.

Given that most of the income is going to be invested back in the upkeep of the tourism industry, it seems like the right thing to do. That way, the quality of life of the local population is unchanged, or may even be better, and the tourism industry can maintain itself. Plus tourists may actually enjoy the fact that their money is going towards something good – like protecting the flora and fauna of that locality for example.

Tourism tax can help build infrastructure and keep tourism sustainable

Like most complex issues, however, tourism taxes are not the only thing that can solve the issue of overtourism. The onus is on the government to try and implement better planning and management systems to complement the tourist tax because simply leeching money off of tourists, even if it is only a little bit, is not a fix of any kind.

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