Scotland Reconsiders Tourist Tax After Business Concerns in the Highlands, Here’s All You Need to Know

Published on December 10, 2025

Recently, the Scottish Highlands have been struggling with overtourism; the Highland Council recently proposed a visitor levy or “tourist tax” meant to generate funds in support of local tourism infrastructure. However, the Scottish government is advising the region to pause after resistance against the policy by local accommodation providers and businesses. Part of ongoing discussions focused on a more flexible approach to visitor levies, this newly balanced economic growth must be measured against the preservation of local tourism.

The Proposed Tourist Tax and Its Goals

The Highland Council had proposed introducing a five percent levy on overnight stays in local accommodations. The intention behind this tax was to raise approximately £10 million annually for the region, which could be invested in improving local tourism services and facilities. The levy would apply to various forms of accommodation, including hotels, bed and breakfasts, and holiday lets, and would be charged per room, per night.

The proposed tourist tax was part of a wider effort to manage the growing number of visitors to the Highlands, which has struggled with the impacts of overtourism. Overcrowded tourist sites, increased pressure on local resources, and the degradation of natural and cultural assets are some of the challenges that have prompted the discussion around sustainable tourism in the region.

Concerns from Local Businesses and the Tourism Sector

Despite the potential financial benefits of the tourist tax, several chambers of commerce in key areas such as Cairngorm, Caithness, Inverness, and Lochaber expressed concerns that the additional cost could discourage visitors. Accommodation providers, in particular, raised “considerable” concerns about the impact of a percentage-based tax on their business, suggesting that it could increase the overall cost of staying in the region and make the Highlands less competitive compared to other destinations.

According to reports, local businesses fear that the levy might disproportionately affect smaller enterprises, which are already operating on tight margins. The concern is that tourists, particularly those on a budget, might choose alternative locations for their vacations if costs rise due to the levy. The introduction of such a tax could also impact the willingness of international tourists to visit the Highlands, especially if the levy is perceived as an additional and unnecessary charge.

Scottish Government’s Response and Recommendations

In response to the concerns raised by local stakeholders, the Scottish government has advised the Highland Council to pause the implementation of the percentage-based tourist tax. The government’s new proposals offer greater flexibility to local authorities, giving them the option to implement a fixed amount for the visitor levy instead of a percentage-based model. This flexibility could also allow councils to set different rates for different areas, times of year, and types of accommodation, ensuring that the levy is tailored to the specific needs and circumstances of each region.

Ivan McKee, the Scottish public finance minister, stated that the new approach would empower local authorities to design a levy system that works best for their areas. “Our aim has been to give councils the flexibility to design a levy that works for their areas, while ensuring businesses can easily understand what it means for them,” McKee said. The government’s goal is to create a system that provides a sustainable source of revenue for tourism development, without putting unnecessary strain on local businesses or discouraging visitors.

A Shift Toward More Sustainable and Inclusive Tourism

The decision to pause the tourist tax is in line with the Scottish government’s broader efforts to promote more sustainable tourism practices. Over the past few years, Scotland has seen a growing emphasis on balancing tourism growth with environmental conservation and community well-being. The visitor levy was intended to generate funds that could be reinvested in maintaining and improving tourism infrastructure, but it also highlighted the importance of managing the volume of visitors in a way that benefits both the economy and the local communities.

For many local residents and businesses, the issue isn’t just about increasing revenue but about ensuring that tourism development is sustainable and doesn’t lead to overcrowding or environmental degradation. The pause in the implementation of the tourist tax provides an opportunity to reevaluate how tourism can be better managed, ensuring that the Highlands remain an attractive and accessible destination for future generations of visitors.

Flexible Visitor Levy Options to Be Explored

The Scottish government’s revised approach will include further consultation with local authorities, accommodation providers, and tourism stakeholders to explore how best to implement a visitor levy system that is fair, transparent, and beneficial to all parties involved. The government will also look at how to ensure that the levy system does not disproportionately affect businesses in more rural or less-visited areas of the Highlands, which may struggle to attract visitors without additional incentives.

The government’s proposed flexibility in levy implementation also aims to give local authorities the ability to experiment with different approaches. For example, councils could choose to charge a fixed amount per night, or set different rates depending on the season or the level of tourism demand. This flexibility could also allow councils to target specific types of accommodation, such as luxury hotels or short-term rentals, ensuring that the levy system is tailored to local needs.

The Path Forward: Enhancing the Tourism Experience

While the pause in the implementation of the tourist tax represents a setback for the original proposal, it also provides an opportunity for a more thoughtful and collaborative approach to managing tourism in the Scottish Highlands. By listening to the concerns of local businesses and providing greater flexibility for councils, the Scottish government hopes to ensure that tourism continues to thrive in the region while preserving the natural and cultural heritage that makes the Highlands such a unique destination.

As the discussions move forward, the goal will be to create a sustainable and responsible tourism framework that can support the region’s economic growth without sacrificing the quality of life for local residents or the visitor experience.

A Balanced Approach to Tourism in the Highlands

It is further demonstration of the balance being sought in the sustainable growth of tourism versus the needs and concerns of local communities and businesses. The continuation of the overtourism issue means that flexibility and collaboration at the political level will be important in the coming years to develop a model of tourism which works for all. With careful planning and consultation, the Highlands can continue to welcome visitors while safeguarding the long-term sustainability of its tourism sector.