Govt. assures fresh support to boost tourism hit by double blow

• THASL holds positive meeting with Secretary to President Dr. P.B. Jayasundera

• Govt. agrees in principle to extend debt moratorium by another year until March 2021

• Zero-VAT scheme to account for 60% local input on annualised rather than quarterly basis

• Travel agents to qualify for VAT exemption as opposed to present 8% 

• Industry’s past dues to municipalities and Provincial Councils to be waived; new Trade Licence levy to be in line with others

• Industry hails Govt.’s fresh commitment and support to revitalise tourism sector

By Charumini de Silva

The Government yesterday promised fresh support to the crucial tourism industry which is suffering from the double whammy of the Easter Sunday attacks and the novel coronavirus outbreak. 

The guarantee was given by Secretary to the President Dr. P.B. Jayasundera during a very frank and positive meeting with the Tourist Hotels Association of Sri Lanka (THASL), Treasury Secretary S.R. Attygalle, Commissioner General of Inland Revenue N. Guruge and Sri Lanka Tourism Chairperson Kimarli Fernando among others. 

Pending new legislation and regulations, Dr. Jayasundera had agreed in principle to several of the recommendations made by the THASL on behalf of the travel and tourism industry. The assurance and support was offered in recognition of the catalytic role the tourism sector could play in bolstering socioeconomic growth within the country. 

The new Government, under the leadership of President Gotabaya Rajapaksa, has a vision to attract five million tourists and $ 10 billion in foreign exchange earnings by 2025. Last year tourist arrivals slumped to 1.9 million from 2.3 million in 2018 and earnings were down to $ 3.6 billion from $ 4.3 billion. 

To ensure a quick revival and sustain it, Dr. Jayasundera has agreed to extend the ongoing debt moratorium to the travel and tourism industry by another year from 31 March 2020 to 31 March 2021.  This translates to a continuous period of two years. 

The THASL delegation, which included President Sanath Ukwatte, Vice President M. Shanthikumar and members Jit Gunaratne, Asoka Hettigoda and CEO Amal Gunatilleke, had also voiced reservations over the impracticality in qualifying for Zero-VAT, which requires 60% local input on a quarterly basis. They suggested that the qualifying criteria be annualised.  

The treatment of travel agents as part of the thrust tourism sector and exempting them from VAT as opposed to an 8% rate at present was also agreed upon in principle. 

Relief was also given to the thorny issue of the industry’s outstanding payments to local councils, a matter which has been before Court for several years. Dr. Jayasundera has agreed to facilitate a write-off of outstanding amounts. Assurances were also given that tourist establishments would not be singled out to be charged 1% of turnover as a Trade Licence levy but treated the same as other industries by local councils. 

THASL President Ukwatte commended the Government and in particular Dr. Jayasundera for being very receptive to industry suggestions and for assuring fresh relief. The need for new legislation to effect these supportive measures means the industry will have to wait until the conclusion of the General Elections. 

Nevertheless, Ukwatte said the industry was encouraged by the commitment of the Government to extend whatever support was needed to revitalise the tourism sector.