Hospitality leaders have opposed the new tax and many locals have also expressed discontent with the council's decision.
Edinburgh now joins cities such as Barcelona and Venice in an attempt to manage a growing number of tourists via taxation. The cost for tourists: approximately £2.50 per person at a mid-range hotel in Paris, Venice is £3.50 per tourist.
Edinburgh's City Council believes the new tax could raise over £29 million per year, it is estimated that visitors spend over £1.4 billion each year in Edinburgh.
The Federation of Small Businesses (FSB) surveyed 124 businesses in the city, with 76% saying they were against the new tax on tourism and 73% saying they thought it would have a negative impact on the local economy.
Willie Macleod, of the British Hospitality Association, said:
"In the vast majority of these destinations, VAT is levied on tourism services including hotel rooms at around half of the 20 per cent rate applied here, including France and Italy where it is ten per cent. Edinburgh council is singularly determined to push this through and we are determined that this is a bad thing for the industry. To suggest that tourism businesses and hotels in particular are not making their contribution to public finances is misleading."
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