ECONOMYNEXT – Sajith Premadasa, a candidate for upcoming polls from a coalition led by the ruling United National Party said he will treat tourism as an export sector if he is elected and appoint a presidential task force to find solutions to the sector.
“I will overcome any obstacle and will categorize tourism the second largest foreign exchange earner for our country under exports industries within 48 hours,” Premadasa told a gathering of tourism sector representative.
He was responding to a request from Sanath Ukwatte, head of the Tourist Hotels Association of Sri Lanka.ly
Ukwatte said tourism industry needs to consider as an export industry because it is the second biggest net foreign exchange earner for the country and as well as to restructure some of the taxes the tourism industry pay.
“We are the highest tax paying industry in the country,” Ukwatte said.
Taxes on hotels include Value Added Tax (VAT), Nation Building Tax (NBT), Tourism Development Levy (TDL), and Economic Service Charge (ESC).
“We are taxed more than 20 percent with VAT and other taxes and with the service charge it is nearly 30 percent,” Ukwatte said.
The service charge is slapped by hotels in Sri Lanka on their own, and not the government.
Export companies are taxed at 15 percent on incomes. Exports are also zero rated for value added tax. It is not clear whether hotels are asking to be zero rated.
In a proper VAT regime, tourists could get a VAT refund when leaving the country.
Premadasa, who is minister for housing, said he will appoint a Presidential Task Force to find solutions to problems in the sector.
Premadasa said he cannot promise to remove the 1 percent levy on tourism sector when getting licenses for hotels without looking in to the details and because it is a revenue earner for the local authorities.
“I cannot give a direct answer for that since it is a revenue earner for the local authorities. But I will look in to the matter and see whether we can give any reliefs for the license gaining proses” he said.
“I will ensure that there will be a stream lining of taxes and simplification where thus industry is not overburdened with a heavy tax”
Sri Lanka Bus Owners association said vehicles used for tourism was being seized by leasing companies after Easter Sunday bomb blasts despite relief prescribed by the central bank.
“Three busses have already being seized by leasing companies and the 1 year relief to pay the lease was also not given to us” the representative of the president of the association said.
“We have a total of 5,200 million rupees of lease amount to pa and the leasing companies are pressurizing us to repay them”
Premadasa said he would speak to Governor of the Central Bank IndrajitCoomaraswmay on the matter and stop the seizing of busses and look in to the matter to see why the 1 year relief was not given.
Premadasa said the one year relief to pay back loans was a policy implement by the government and it should be given to the relevant sectors without any restrictions.(Colombo/ 23 October/2019)