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VAT a way to attract tourists
Tourists, while leaving the country, will be entitled to obtain refunds on Value Added Tax (VAT) payments for goods they buy in Sri Lanka from next month, a senior official said. The Inland Revenue Department’s Deputy Commissioner General, Nadun Guruge, said the Tourist VAT Refund System (TVRS) was aimed at attracting tourists and generating income by sale of products.
He said that from June 1, the tourists would be able to obtain the VAT refund –15 percent of the value of the good — at the Bandaranaike International Airport (BIA) and other ports after the bills were produced. Mr. Guruge said that on arrival itself the tourists would be informed about the locations where they could purchase goods such as clothing, electronic items and imported items available for sale.
The official said there was a similar scheme in Singapore where there was now fully automated system tax repayment for tourists. This had been done manually till 2011. He said Sri Lanka would initially introduce the VAT refund manually but hoped to automate it in a year or two.Mr. Guruge said that with the opening of the Colombo Port City, tourist arrivals were expected to increase significantly and that was another reason for the VAT bonus being offered to them.
A Singapore firm is currently helping the IRD in the automation of the tax collection system.