Tourism VAT cut ‘would benefit’ independent Scotland

An independent Scotland should cut VAT on tourism in order to stimulate the sector, MPs and trade associations have said.

The current rate is set at 20% but the Cut Tourism VAT Campaign would like to see it reduced.

The Scottish Tourism Alliance, the British Hospitality Association (BHA), and several others have all expressed the view that Scotland should cut the rate of VAT on accommodation and visitor attractions from 20% to 5%.

Graeme Dey, MSP, said: “The VAT rate on tourism in Scotland and the refusal of the UK Government to cut it, is just one of many examples of why Scotland’s interests would be best served by being an Independent country.”

Mike Weir MP, who is SNP Westminster spokesperson on Business, Innovation & Skills and Energy and Climate Change, said: “At present VAT is controlled from Westminster which has steadfastly refused to implement a cut, despite the fact that VAT on tourist related business is lower in most other EU nations.

“With Independence, we would have the powers to set VAT rates to benefit our tourist businesses and to focus on a boost for our rural economy.”

Campaigners believe that reduced rate of VAT would enable hotels, visitor attractions and other related tourism businesses become more competitive. It is hoped that this would lead to increased sales and more employment opportunities. The loss of VAT would then be recouped by greater revenues from tourism.

Graham Wason, chairman of the Campaign for Reduced Tourism VAT, says: “If Scotland opts for independence and subsequently cuts VAT on tourism; it would benefit significantly at the expense of the rest of the UK.

“It would also attract more visitors from abroad, so earning export revenue and improving its balance of payments. In these circumstances, the mistake by the rest of the UK in not cutting tourism VAT would be exposed.”

BHA chief executive Ufi Ibrahim said: “Whether or not Scotland opts for independence, there is no doubt that over the medium and long term, its economy would benefit substantially from a cut in tourism VAT – and that conclusion is supported by the Treasury’s own model.

“The consequence of Ireland’s VAT cut was an increase in overseas tourist numbers and revenue which helped to create up to 25,000 new jobs.”

Sourced from TTG Digital

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