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Council / Cruise visits to be considered in tourist tax proposals

An archive image of cruise ship passengers in Lerwick. Photo: Calum Toogood/Lerwick Port Authority.

THE IDEA of a financial levy potentially being placed on cruise ships will be considered by the Scottish Government under plans for a ‘tourist tax’.

The discretionary tourist tax, which – if passed as legislation – would give councils an extra way of raising money, but it would not be mandatory.

The focus has mainly been people staying overnight in accommodation like hotels, replicating what happens in some European cities, but local government association COSLA has requested that cruise ship passengers be placed under consideration too.

Shetland Islands Council leader Emma Macdonald said she was aware of the suggestion but had no details on how it could work in practice.

“Having additional tax raising abilities shouldn’t be something that replaces funding for essential services,” the councillor warned.

“Once we have more details on this I’m sure we will be considering it as a council.”

Nearly 100 cruise ships visited Lerwick this year, and there are strong advance bookings for 2023.

Passengers can generally disembark and explore Lerwick, or further afield.

However, the general idea of a tourist tax has not been too warmly welcomed by Shetland in the past – even if it is not mandatory.

Responding to a 2019 consultation on the idea, Tommy Coutts from the Shetland Islands Council’s economic development team saying there is already an “islands premium” paid by visitors.

He said at the time that while the principle of greater revenue generating powers is welcomed, a tourist tax is an “unattractive proposition”.

Responding to the consultation Shetland Tourism Association had warned that the management of such a scheme would be “very different” in the isles compared to a place like Edinburgh.

But it did show support for applying a levy to cruise ship passengers who are day visitors to Shetland.

Meanwhile Lerwick Port Authority, which oversees the arrivals of most cruise ships in Shetland, said additional taxes on passengers could have a bearing on consumer decision-making.

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“A concern for us as a trust port, would be the municipality enforcing tax regimes which could potentially affect our competitiveness in the region and ultimately our income streams if any displacement occurs,” it said in response to the consultation.

It added that a ‘disembarkation tax’ would be difficult to administer and could influence passengers’ decision making on whether to go ashore or not.

The port also said that a ‘mooring tax’ could have negative reputational impacts as Scotland is already regarded as an expensive detestation for the cruise industry compared to the rest of Europe.

Regarding the idea of a cruise ship levy, a COSLA spokesperson said:  “COSLA is exploring, with Scottish Government, all options for local revenue raising.

“COSLA’s position is that councils should be enabled to introduce revenue raising appropriate to local circumstance.”

A Scottish Government spokesperson said: “The Scottish Government will be introducing a Local Visitor Levy Bill to Parliament and if passed, it will give local authorities a discretionary power to apply a levy on overnight visitor stays in accommodation in their area.

“Additional funds raised will be for local authorities to use, helping to fund relevant local activities and services.

“COSLA has requested the consideration of a levy being placed on cruise ships as part of the bill.

“The Scottish Government will consider that proposal as it continues to work in partnership with all stakeholders, including the tourism industry, councils and others, as the draft legislation is developed to create the levy.”

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