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I welcome that. There may be another amendment for stage 3 on who from tourism representative bodies in a wider council area would then be involved in that decision making on expenditure. I am happy to take that on board.

Turning to the other amendments in the group, I welcome many of Sarah Boyack’s amendments. However, other council areas, though perhaps not Edinburgh and Highland, which have both long advocated for a tourist levy, are concerned about it being established. We need to take into account the many concerns that have been expressed about the set-up period and the systems that businesses would use. Therefore, we do not support amendments 21 and 25, but we support Sarah Boyack’s other amendments in the group.

I will not be moving amendment 46, convener.

In light of the minister’s comments, I will not move amendment 46.

Amendment 46 not moved.

Amendment 22 not moved.

Section 13 agreed to.

Sections 14 to 16 agreed to.

Section 17—Use of net proceeds of scheme

I support all the amendments in the grouping, which goes to the heart of who will be impacted by the bill, which is businesses the length and breadth of Scotland.

Our tourism sector is really diverse across many communities in Scotland. Importantly—Daniel Johnson touched on this—the levy will not just be about hotel chains with an information technology department and a bookings team; it will be about individuals who might run their business out of a diary and who, all of a sudden, are turned into a Government tax collector. We have to be mindful of what that will do to businesses and the consequences that they will face for not being able to report on time or collect what might be a complex levy.

On Pam Gosal’s amendments on VAT, it is important to note that around 20 per cent of unregistered borderline businesses admit to having taken action to remain below the threshold and outside of VAT systems, so it is important that we consider behaviour change in the industry.

My amendment 42 would make provision to ensure that a business impact assessment is undertaken. After the bill is passed, it could provide an opportunity to address concerns around the potential economic impact of the legislation. I hope that the minister and the committee will see that the introduction of such a provision could be useful in scoping the impact of the legislation.

During stage 1, the committee did not take a position on whether it supports a percentage scheme or a flat rate. However, it was clear that all the businesses that gave evidence to the committee, whether in person or through written submissions, would prefer a flat-rate fee. That was partly because of the simplicity of implementation. A flat rate would make returns far easier to introduce, administer, calculate and submit and, perhaps most important, it would be easier to explain to guests. As the committee heard, the use of a percentage system to calculate a visitor levy could also cause confusion because of the complexity of additional services being provided—for example, meals—which would make it harder to calculate the percentage fee.

Given the concerns that have been voiced with regard to the impact on business, Conservative members believe that, if the bill is passed, a flat-rate fee would be the simplest way of implementing a levy.

I move amendment 27.

In light of what the minister has said and his amendment 15, which we will be supporting, I will not move amendment 42. That will enable further conversations to take place ahead of stage 3.

Amendment 42 not moved.

Amendments 43 and 44 not moved.

Amendment 8 moved—[Tom Arthur]—and agreed to.

The Government’s decision to support a percentage rate raises concerns with regard to what that might mean and how it will be interpreted at council level. If the rate is set at 5 per cent—I think that is the rate that the Scottish Government is currently proposing—will that lead to a sliding scale on which different councils can appeal? That might lead, in turn, to different councils deciding to charge different rates, which I think is the concern that has been expressed by two of the key councils for tourism activity—the City of Edinburgh Council and Highland Council. Could the minister clarify that?

Could you clarify something? My understanding is that, at the moment, the proposal in the bill is that a charge be made for seven nights of someone’s stay, and your amendment would double that, to 14 nights per calendar month. What guidance would be included in the bill in that regard? Perhaps the minister can also comment on that.

I heard what the minister had to say. As in our committee work on short-term lets, it is concerning that a framework bill leaves interpretation to councils. We know of two legal challenges that the City of Edinburgh Council has faced because of its interpretation of that legislation, and the Government’s approach sets up the legislation to be potentially problematic, with different councils deciding on different percentages. I will therefore test my amendment 27, to see what support there is for it in the committee.

I press amendment 27.

In the interests of time, convener, I will not move the other amendments in the group. However, I put on record that, for stage 3, we need far more clarification of how a percentage system would work and the impact that it would have. If that is just in guidance, there will be differentiation across Scotland. Specifically, I hope that the points that Mark Griffin raised will be taken on board by the Scottish Government for stage 3.

Amendment 29 not moved.

Section 5 agreed to.

Section 6—Rate for levy

Amendments 30 and 31 not moved.

Amendment 6 moved—[Tom Arthur].

Amendment 46 is a probing amendment. It comes from some of the evidence that we took from communities that are part of larger council areas. They are concerned. Businesses that operate in Skye and Arran raised concerns about significant tourism activity on those islands and whether they would secure a fair share of that funding once the local authority that they are part of takes decisions over where that would be distributed. I want to probe ministers on how the money that is raised is reported and what role they would play in where that money is spent. That important principle has not been pursued in the bill.

As with other amendments, I am happy to discuss that further with the minister. When substantial tourism activity takes place in parts of a council area, it is important that businesses in those areas benefit and that any money raised does not just go into the council’s wider pot.