Local politicians in Shetland have decided not to move forward with plans to introduce a tourist tax in the region. Instead, they are exploring alternative methods to generate revenue in collaboration with the Scottish Government. The decision was made during a meeting of the Shetland Islands Council’s policy and resources committee following a study on the proposed levy.
Council leader Emma Macdonald expressed her opposition to the tax, stating that it was not a suitable solution for their circumstances. A report presented to the council highlighted the potential risks outweighing the benefits, including concerns about the burden it would place on accommodation providers and the possible impact on visitor numbers.
Recent Scottish legislation grants councils the authority to impose a levy on overnight stays to create an additional income source. While similar levies exist in various cities worldwide, a report indicated that implementing a five percent levy, with 30 percent of visitors exempt, would likely generate less than £1 million over ten years in Shetland.
Earlier this year, consultants were appointed by councils in Shetland, Orkney, and the Western Isles to assess the feasibility of a visitor levy scheme in each region. Point of entry and cruise levies were considered as potentially more favorable revenue-generating options. Although the Scottish Government explored the idea of a separate cruise ship levy, no decisions have been finalized. Macdonald suggested that a point of entry or cruise ship levy might have merits, but the visitor levy was deemed unsuitable for Shetland.
Deputy Gary Robinson opposed the visitor levy, believing the process had come to a natural conclusion. He mentioned that the levy seemed like a solution tailored for addressing visitor economy issues in Edinburgh. Robinson also pointed out the high costs for tourists traveling to Shetland as a factor to consider.
He emphasized that if First Minister John Swinney supported greater autonomy for Shetland, empowering the local authority to make decisions on income generation matters like the levy would be a positive step. Robinson noted that the recent increase in NorthLink ferry fares could potentially generate more revenue than the proposed levy. Additionally, Robert Thomson, the North Isles representative, mentioned receiving feedback from local businesses unsupportive of the levy scheme.
