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Monday February 6th, 2023

Sri Lanka hotels, travel agencies to get 4-pct loan on EPF records: Tourism Authority

ECONOMYNEXT – Sri Lanka’s Tourism Development Authority said a loan at 4.0 percent interest would be given to hotels and travel agencies and restaurants registered under it to pay salaries for 144,000 persons for the next six months

About 124,000 staff with employment records in hotels and travel agencies as well as over 10,000 workers at restaurants, spas, tourist shops and water sports centres could benefit, the SLTDA said.

The funds would be credited by the Bank of Ceylon based on EPF records of employees.

Tourists guides would get a one-off payment that they would not pay back.

The full statement is reproduced below

Detailed list of relief measures given to the tourism industry stakeholders registered with SLTDA.

With the objective of sustaining the lives of approximately 144,000 persons directly involved in the tourism industry and linked to establishments registered with the Sri Lanka Tourism Development Authority, following relief measures have been proposed with implementation mechanisms.

1. Provide a loan at 4% to accommodation providers and destination management companies (DMCs) registered under SLTDA to pay salaries for approximately 124,000 employees through Bank of Ceylon (BOC) without collateral, under the Post COVID-19 Relief budget of the government.

The bank will directly remit salaries up to a maximum of Rs. 20,000/= per employee for six months based on the EPF/ ETF records supplied by the accommodation owners. SLTDA will provide details of all the accommodation providers and DMCs registered under the Authority.

2. A similar loan facility will be made available to pay salaries of approximately 10,000 employees of 850+ establishments providing facilities to tourists, registered under SLTDA including; Restaurants, Tourist Friendly Eating Places, Spa & Wellness Centers, Spice Gardens, Tourist Shops and Water Sports Centers.

The bank will directly remit salaries up to a maximum of Rs. 15,000/= per employee for a period of six months based on the EPF/ ETF records supplied by the owners of the establishments.

3. Eligibility and Conditions for No. 1 and 2.

– All entities falling under above categories registered with SLTDA or whose registration is being processed at the authority are eligible. (including foreign investments/owners)

– Entities who have paid TDL (Tourism Development Levy) will be given 1st preference.

– All loan disbursements will be to employers who have made employee EPF payments during 2019.

– All disbursements will be via Bank of Ceylon (BoC) and will be subjected to a corporate guarantee or personal or independent guarantor acceptable to Bank of Ceylon.

– Until the full repayment of the loan is done, the borrower is required to be registered with SLTDA. Failure to do so would be a breach of covenant.

– All loan disbursements will be remitted directly to employee bank accounts monthly.

– Registered entities who have availed the soft working capital loan during April, May and June 2020 will be eligible.

4. Repayment of 1 and 2.

The interest rate applicable is 4% per annum and this will be a Five (5) year loan with a two-year grace period from the date of disbursement.

5. Tour Guides and Tourist Drivers who are employed per tour basis and not entitled to EPF/ETF, SLTDA would provide one-off payments of Rs.20,000 to tour guides and Rs.15,000 to drivers registered with the Sri Lanka Tourism Development Authority.

These payments would be directly remitted to their bank accounts by the Authority.

6. Instructions to be given to the Ceylon Electricity Board and the National Water Supply and Drainage Board to delay claiming dues from SLTDA registered accommodation providers for period from 1stMarch to 31stAugust 2020 and provide a 12-month instalment plan to settle the cumulative bills.

In the event Electricity and/or Water Bills have been paid during this period, an additional period of credit to be given; to ensure 12 months grace period in total.

7. The Central Bank to issue circular giving instructions to Banks and Financial Institutions to extend the six months grace period given for vehicles leased for tourism purposes to twelve months without considering the existing lease agreement and without default charges during the grace period.

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Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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