The tourism sector, which is suffering the most from the double whammy of Easter Sunday terror attack followed by the COVID-19 pandemic, has been given further lifeline via the 2021 Budget presented by the Government yesterday.
Prime Minister and Finance Minister Mahinda Rajapaksa proposed to extend the concessions and recovery of loans granted under the re-financing facilities of the Central Bank of Sri Lanka until 30 September 2021. Previously, the extension was till 31 March 2021, whilst the industry request was for two more years. The tourism sector, like the other sectors, are also benefitting from a debt moratorium.
More importantly, Rajapaksa proposed to provide the banks with a Treasury guarantee covering 50% of re-financing loans granted to the tourism sector.
“I also propose to make necessary amendments to simplify the taxes and fees levied by the Local Government Institutions on tourism with an upper cap,” he added.
Separately, unique tourism projects with investment of over $ 10 million will be offered concessions, up to a maximum of 10 years under the Strategic Development Law. Re-organisation of five existing institutions related to the tourism sector under the Tourism Promotion Authority was also announced.
In support of new measures announced, Premier Rajapaksa said the COVID-19 dealt a serious blow to the tourism industry, before it could barely recover from the collapse experienced due to the Easter attacks.
“We need to formulate strategies to develop the tourism industry that has diversified fairly well and the tourist attractions in our country under normal conditions while protecting them at this juncture. Although it will take time, there are many opportunities to develop the tourism industry as a sector worth over $ 10 billion,” he said.
“The tourism industry can be developed in the short run by tapping into the domestic tourism sector, which has otherwise spent almost $ 1,500 million per annum for foreign travel, to make use of the domestic tourist facilities by developing such facilities under strict health regulations,” he added.