Sri Lanka’s tourism sector receives fresh support from 2021 Budget

Sri Lanka’s tourism sector receives fresh support from 2021 Budget

Sri Lanka’s tourism sector, which is suffering the most from the double whammy of the Easter Sunday terror attack followed by the Covid-19 pandemic, has reportedly been given a lifeline through the Sri Lankan government’s 2021 Budget. 
Sri Lanka’s Prime Minister and Finance Minister Mahinda Rajapaksa has proposed to extend the concessions and recovery of loans granted under the re-financing facilities of the Central Bank of Sri Lanka (CBSL) until 30 September 2021.

According to the Daily FT, previously, the extension was till 31 March 2021, whilst the industry request was for two more years. The tourism sector, like the other sectors, are also benefitting from a debt moratorium. 

The Prime Minister has also proposed to provide the banks with a Treasury guarantee covering 50% of re-financing loans granted to the tourism sector.
“I also propose to make necessary amendments to simplify the taxes and fees levied by the Local Government Institutions on tourism with an upper cap,” the Premier has noted. 
Separately, unique tourism projects with investment of over US$ 10 million will be offered concessions, up to a maximum of 10 years under the Strategic Development Law, the Daily FT report noted.

The government has also announced the re-organisation of five existing institutions related to the tourism sector under the Tourism Promotion Authority. 
“We need to formulate strategies to develop the tourism industry that has diversified fairly well and the tourist attractions in our country under normal conditions while protecting them at this juncture. Although it will take time, there are many opportunities to develop the tourism industry as a sector worth over $ 10 billion,” Rajapaksa had said. 
“The tourism industry can be developed in the short run by tapping into the domestic tourism sector, which has otherwise spent almost US$ 1,500 million per annum for foreign travel, to make use of the domestic tourist facilities by developing such facilities under strict health regulations,” he has added.

OSL take:

Sri Lanka’s tourism industry was one of the fastest growing economic sectors in the country until the global Covid 19 pandemic affected the entire tourism industry the world over. Sri Lanka has been listed as a must visit destination by several leading global travel publications and has also received certification as a safe and hygienic destination. All this will put Sri Lanka among the top countries in the tourism industry. Tourism authorities have also continuously maintained tourist interest in Sri Lanka through various innovative campaigns like couch safari, etc. Sri Lanka’s tourism industry will therefore show a quick return to normalcy. Foreign businesses/investors could therefore explore business opportunities in Sri Lanka’s tourism industry.  

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Article Code : VBS/AT/24112020/Z_3

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