Sri Lanka extends tax incentives to boost air traffic at key airports
Daily FT: The Cabinet of Ministers at their meeting this week approved an extension of tax concessions for airlines operating into three key airports — Jaffna International Airport, Colombo International Airport (Ratmalana), and Mattala Rajapaksa International Airport.
The move intends to increase air traffic attracting international carriers, utilise facilities and boost tourism.
The concessions include a 50% waiver on deviation tax for airlines operating scheduled flights to Jaffna International Airport, which will now remain in effect till 30 January 2026. In addition, airlines servicing Colombo International Airport (Ratmalana) will enjoy the same 50% waiver for one year starting 27 March 2025.
For Mattala Rajapaksa International Airport, a full deviation tax concession will be extended for another year from 29 December 2024.
“These concessionary schemes are part of a broader strategy to enhance connectivity, attract more tourists and support local economic growth through increased travel activity. Measure also aims to encourage airlines to bring down ticket prices to attract more tourists to Sri Lanka,” Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting media briefing.
Noting that the aviation industry serves as a critical pillar of Sri Lanka’s tourism sector, he said by providing financial incentives, the Government hopes to attract more airlines, promote tourism and stimulate economic activity in the regions served by these airports.
OSL take:
The ongoing economic expansion experienced by Sri Lanka and the steady increase in foreign travelers arriving in the country have resulted in the expansion of tourism and airport and aviation industries. This has resulted in an expansion in the business/investment opportunities in these industries as well. The steady increase in foreign travelers visiting the country is evident by the increase in the number of flights operated by international airlines to Sri Lanka. The growth recorded in the tourism and airport and aviation industries have also resulted in a growth in the country’s revenue generation, resulting in the Sri Lankan government looking at further boosting air traffic to Sri Lanka. However, the increase in air traffic and the number of foreign travelers to the country has created many business/investment opportunities in Sri Lanka’s tourism and airport and aviation industries to meet the increasing demand. This demand would witness further growth with Sri Lanka’s target of achieving regional hub status. Foreign businesses/investors could therefore explore the direct and indirect business/investment opportunities in the tourism and airport and aviation industries that also include the development infrastructure and supplementary infrastructure facilities. Given that many foreign businesses/investors are already exploring and expressing interest in engaging with Sri Lanka in the fields of tourism and airport and aviation, it indicates opportunities for more foreign entities to engage with Sri Lanka.
Article Code : | VBS/AT/20250110/Z_3 |