Tourism Minister Prasanna Ranatunga

Tourism Minister Prasanna Ranatunga is planning to submit several special Cabinet papers to revise the taxes of Local Government bodies on tourist hotels, restaurants and residences, in a bid to provide further concessions on electricity bills.

He pointed out that the Cabinet Paper on Local Government tax amendments would be submitted jointly with the Minister of Public Service, Provincial Councils and Local Government. 

Ranatunga also said that the Cabinet paper to provide relief on electricity bills had already been drafted.

Local authorities are empowered to charge a license fee of up to 1% of the annual turnover of a hotel, restaurant or lodge registered with the Sri Lanka Tourism Development Authority (SLTDA). As a result, the stakeholders have to pay a significant amount of their annual revenue to local authorities.

In addition, other taxes and waste collection taxes are also paid by the relevant stakeholders to Local Government bodies. The Minister thereby suggested that taking these factors into consideration he has proposed the tax amendments. 

Arrangements have also been made to submit a separate Cabinet paper to further extend the electricity bill concession granted by the Ceylon Electricity Board (CEB) to tourist hotels, restaurants and residences.

From 1 March 2020 to 28 February 2021, tourism entities were given an electricity concession. This was further extended till the end of this year, whilst also adjusting the unit price of electricity in the hotel sector after comparing it with other industries.

The Minister has requested the CEB in the new proposal to provide relief for tourist hotels, restaurants and homestay units that were registered with the SLTDA, to pay all the outstanding accumulated electricity bills from March 2020 to 31 December 2021 in 36 instalments with effect from 1 January 2022. He also requested the CEB not to terminate the electricity supply until the end of that period.

These two Cabinet papers were drafted after taking into account the demands made by stakeholders engaged in the tourism sector. It is hoped that the gradual recovery of the tourism industry will address the problems faced by them from next year.

Experts call on SL to look at post-pandemic tourism differently