Tourism industry raises alarm bells on budget
Sri Lanka’s tourism industry is alarmed over Treasury moves to stop direct tax collections into the four state institutions from the sector, following budget proposals to withdraw such payments. Two key industry associations, the Tourist Hoteliers Association of Sri Lanka (THASL) and the Sri Lanka Association of Inbound Tour Operators (SLAITO,) in a letter to the Treasury Secretary Dr. R.H.S. Samarathunge have urged that in the event that the Tourism Development Levy (TDL) and the Embarkation levy are withdrawn from the fund, an assurance be given that a sum equivalent to the collective sum that was credited to the fund in 2015 be allocated to the Sri Lanka Tourism Development Authority (SLTDA) for the activities of that authority.
This letter was drafted following a meeting of the two associations on Thursday to discuss the impact of the budget proposals on the tourism sector. The TDL comes from a 1 per cent charge from tourists for services obtained which together with one third of the embarkation levy is sent directly to the Tourism Development Fund. Under the 2016 budget proposal these are being withdrawn from the fund.The Tourism Act No. 38 of 2005 provideds for the establishment of a fund and the levy and collection of the TDL as well as one third of the embarkation tax direct to the fund in a bid to obviate the need to canvass for allocations each year from the Consolidated Fund, to finance the activities of the four vital institutions of SLTDA, the Sri Lanka Institute of Tourism and Hotel Management (SLITHM), Sri Lanka Tourism Promotion Bureau (SLTPB) and the Sri Lanka Convention Bureau (SLCB) for tourism related projects.
The industry noted that should these funds be abolished it could have “a serious impact on the financial capacity of these institutions to discharge their statutory obligations unless adequate allocation is granted.”The letter points out that the principle behind the very establishment of these institutions “by statute” would be negated if they were not adequately funded.
Moreover, it was noted that the potential of the tourism industry to move from a Rs.3 million industry to a Rs.10 million is dependent on the institutions being funded adequately to discharge their statutory functions. In addition, the industry noted should electricity be removed from the exempted category, the increase in Nation Building Tax (NBT) to 4 four per cent would be significant for the tourism sector considering that it comprises a large component in the respective budgets of hotels.
| TDL funds transferred to Treasury Some of the funds in the Tourism Development Levy (TDL) are being transferred to the Treasury in a bid to “bridge the gap on internal finances,” Tourism Minister John Amaratunga said. He told the Business Times that the TDL had accumulated funds over Rs.1 billion. As a result of this, even he, the minister had questioned the reason for the accumulation of these funds without being used. The minister said that since the Treasury was looking for funds it had also asked for some of this money recently in a directive to the Tourism Ministry Secretary. Minister Amaratunga said that the directive sent had requested for about Rs.500 million to be transferred to the Treasury and it was assumed that it “may be to bridge the gap on internal finances.” | |