A tourist tax in Edinburgh to be approved by April

Edinburgh City Council is currently in discussions with Scottish and UK government about the possibility of introducing a tourism tax

The tax, which is likely to be a levy on hotel rooms, could raise millions each year - making a significant contribution towards the city's tourism infrastructure while lessening the burden on public funds. A source at Edinburgh City Council has told MailOnline Travel that the levy could be imposed 'as early as the end of this year'.

A Tourism Visitor Levy was included in the proposal for the City Deal currently being considered by UK and Scottish Governments according to a representative at Edinburgh City Council. It will cover Edinburgh, East Lothian, Midlothian, West Lothian, Scottish Borders and Fife. However, a separate discussion with Scottish ministers, which covers only Edinburgh, is also in place so that even if the City Deal doesn't go through, Edinburgh could still impose the levy if the city gets the go ahead from the Scottish Government.

The source told MailOnline Travel: 'A decision could be reach in the next couple of weeks or by March or April. If it goes through by spring or summer then it could be imposed as early as the end of this year. The possibility of a tourism tax has already prompted hot debate in Edinburgh

Deputy leader of Edinburgh City Council Sandy Howat said in a statement: 'For Scotland's Capital city, a form of 'tourist tax', as part of a new package of local government funding, would make perfect sense as we aim to offset public funding cuts and invest in our city.

'Such a levy could be as little as £1 per night but still provide the city with up to a £15 million boost for supporting culture and city infrastructure.'

'It would not necessarily be a blanket tax across the city and I would in fact hope to see large hotels pay a bit extra, with small hotels providing a bit less or nothing at all.'

He added: 'Additional revenue could be used to build additional capacity across the city to develop our cultural and festival programme and ensure the city presents itself as a world leader to visitors and locals alike.

'While an agreement is still to be made, we are in talks with Ministers and remain hopeful.'