A TOURISM tax could raise up to £29m a year for Scotland’s capital city, MSPs will be told today.

Members of Holyrood’s culture committee are to take evidence on the policy from council bosses who want to introduce a levy on tourists to raise more funds.

The Scottish Greens have called for local authorities to be handed more revenue generating powers, and have signalled its MSPs will not back the Government’s budget if progress is not made on it or the wider issue of local taxation reform.

Local authorities do not have the power to introduce a tourist tax and establishing such a power would require an act of the Scottish Parliament.

Ahead of today’s meeting, written evidence by Edinburgh City Council to MSPs on the culture committee said 58% of local authorities’ budgets are ringfenced through Scottish Government policy commitments, meaning local government was restrained in responding to local need.

“Local authorities want to deliver choice for their communities. But fundamental to this is the ability to pay for those choices in a situation of democratic accountability,” it said.

“Introduction of a levy could bring substantial revenue: depending on the model, an Edinburgh transient visitor levy [TVL] could raise between £5m and £29m a year. “

The paper concluded: “The case for a tourist tax isn’t a new one, but it’s a strong one, applicable to different parts of the country in different ways. In Edinburgh, we believe there is a clear rationale for implementing a TVL and the council is seeking the Scottish Government and Parliamentary support for the legislative power to take this forward.

“We believe this needs to be done through a legislative provision if it is to be well implemented and flexibly applied across the country in a way which is sensitive to local circumstance.”

Adam McVey, the SNP leader of Edinburgh City Council, will give evidence along with Jenny Laing, leader of Aberdeen Council, and Bill Lobban, leader of Highland Council.

In July, Fiona Hyslop dismissed an announcement by McVey for a tourist tax in Edinburgh. The Culture Secretary criticised a statement by the council leader, saying that a tourist tax “will be ready for implementation” next summer.

Some forms of tourist tax are already in place in cities such as Paris, Rome, Budapest, Prague, Berlin, New York and Dubai. Athens, Paris, Rome and Florence use a “progressive visitor levy” model which charges a higher tax for a higher class of room. Rome charges €7 for a five-star room and €4 for a three-star room, while Paris charges €3.30 and €1.65 for those.

Venice charges a progressive tax based on the cost of the room — at €2 for rooms up to €70 and €3 for rooms over €130, for instance.

Glasgow City Council will today debate whether a tourist tax should be introduced. Last night a spokesman for the local authority said it did not have a position on the matter.

A Scottish Government spokesman said: “We have no plans to introduce visitor levy on the tourism sector.We continue to deliver a fair deal to councils across Scotland, with revenue and capital funding increasing in real terms over the next financial year.”