Drivers to get slapped with tourism tax in drastic move to stop cars clogging up streets

Edinburgh is set to become the first city in Scotland to introduce a tourism tax on drivers entering the capital, potentially impacting the amount of visitors the area receives.

It comes after new powers were granted by the Scottish Government to impose tariffs and help reduce the number of vehicles clogging up streets.

Edinburgh City Council approved a proposal called the “Transient Visitor Levy”, scheduled to come into force on September 20.

After the tax is introduced, the council will be holding a 12-week consultation for residents about the effectiveness of the measures. The results are set to inform the final scheme and will be considered by councillors early next year.

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When in force, the charges on drivers and tourists are expected to raise up to £50million every year which will be used on city improvements.

The levy will apply to guests staying at hotels, B&Bs, hostels and holiday rentals, including Airbnbs.

Visitors will be charged five per cent of the cost per room per night, with the fee capped at seven consecutive days.

Council Leader Cammy Day said: “This is a once in a generation opportunity for Edinburgh and I’m pleased to see Government move quickly on this. We’re looking forward to harnessing the opportunities the new legislation will bring.”

Day added: “Since the Visitor Levy Scotland Bill became an Act on July 5, we’ve been working on our plans to run a wide scale public consultation that will seek views on our draft scheme.

“We’ve spent many years designing a scheme that works for our city, and we’ve published details of our plans for a five per cent levy on overnight stays.”

However, some tourism operators have expressed concerns about the impact a pending tax will have on the drivers and local businesses.

Marc Crothall, chief executive of the Scottish Tourism Alliance, told Skift: “It remains a very contentious matter. There are concerns around the future total price point to the customer and what impact this might have on future bookings.”

The Highland Council is also considering implementing a tourist tax under the new powers introduced by the Scottish Government.

The region, known for its mountains and glens, receives over six million tourists annually, including daytrippers and cruise passengers.

Highland authorities plan to begin a three-month consultation period later this year, allowing residents to voice their opinions on the proposed levy.

Similar to Edinburgh’s tax, it would be a percentage of the accommodation cost per night, although this would also include taxing motorhomes and caravans who come to the region.

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The Highland region had previously explored the idea of a visitor charge in 2019, with estimates showing it could raise up to £10million annually for improving local infrastructure.

The planned taxes also show Scotland’s strategy to balance tourism revenue with city management and infrastructure improvements while removing high-polluting vehicles from the streets.