Accommodation providers are urging Fife Council to tread carefully as they consider plans for a tourist tax.
Councillors have agreed to start discussions with businesses and communities over the next few months.
This will allow the local authority to make an informed decision on whether a Fife visitor levy is a good idea.
Fiona Campbell, from the Association of Scotland’s Self-Caterers (ASSC), says she has major reservations.
“Fife Council must tread carefully with their plans given the importance of tourism to the local economy,” she said.
“They simply cannot afford to make mistakes.
“It needs to be right from the very outset and they must be open about who will be charged.
“It won’t just be foreign visitors but ordinary Scots staying in the area, including Fifers themselves.”
Fife tourist tax could bring in £8m a year
This week’s agreement to get the ball rolling does not mean plans for a tourist tax will materialise in Fife.
It is just an initial step as council officers investigate the pros and cons.
It is believed it could generate as much as £8 million a year to spend on tourism infrastructure, such as parking, toilets and campervan facilities.
However, it could add an extra burden on businesses and there are fears visitors could be put off by an extra levy.
Ms Campbell added: “Fife Council should take stock and pause any further plans until the government reviews and amends its legislation.
“Rushing such an important decision will benefit no-one.”
Meanwhile, the ASSC has urged all levels of government to work closely with the business community to ensure the tourist tax is “fit for purpose”.
“This is the only way to ensure the levy does not damage the very sector it is intended to support,” Ms Campbell said.
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