Banks disburse Rs. 120 bn among the affected tourism sector
Sri Lanka’s commercial banks have disbursed Rs.120 billion among tourism sector personnel and institutions affected by bomb attacks targeting churches and luxury hotels in Colombo on Easter Sunday last year, a senior Central Bank (CB) official disclosed.
Deputy Governor of the CB, H. A. Karunaratne told a media conference in Colombo on Thursday that the banks have issued these loans to tourism sector institutions and individuals, on a case-by-case basis.
Under the Enterprise Sri Lanka loan schemes, an allocation of Rs. 1.514 billion has been made for providing relief for the tourism sector loans.
The tourism sector has been granted a fresh working capital loan under Enterprise Sri Lanka by the previous regime with a repayment period of two years with a 75 per cent interest subsidy borne by the government from the effective interest rate until March 31, 2020.
The interest will be at 3.4 per cent as the government is giving a 75 per cent interest subsidy.
The maximum working capital loan amount will depend on the existing annual turnover of tourism sector personnel and institutions. A moratorium was announced by CB to tourism sector institutions and individuals, on a case-by-case basis.
The moratorium period will be until March 31, 2020 for both capital and interest payments granted to the tourism sector as of April 18, 2019.
Capital and interest falling due during the moratorium period should be converted into a term loan which should be recovered from July 2020 and charged a concessionary rate, a CB official said,
According to Finance Ministry sources, VAT has been reduced from 15 per cent to 5 per cent on hotels and tour operators registered with Sri Lanka Tourism Development Authority (SLTDA) from April 1, 2019 to March 31, 2020.
A concessionary period of one year from January 2020 has been given for the payment of tourism development tax payable from December 31, 2019 by the tourist institutions registered with the SLTDA, the CB official said.
However, since the expected increased number of tourist arrivals has not been experienced after the Easter day attack, it is apparent that the relevant concessionary period is suitable to be extended, he added.
Under these circumstances, the concessionary period has been extended for another four months up to April 30, 2020 and to recover the unpaid tourism development tax applicable to the period to be recovered in 20 equal installments with effect from May 1, 2020, he added.
The informal tourism sector including many small scale hotels, service providers and inns are eligible to an interest free loan of up to Rs. 500,000 taking into consideration the impact of the Easter Sunday attacks.
The interest-free loan is expected to be repaid in three years with a grace period of 12 months.