Budget 2016:

Tourism industry cautions against retrogressive taxes

by Shirajiv Sirimane

The government should think twice about imposing ad hoc taxes and increasing red tape through such measures, Harry Jayawardena told the first meeting of the newly appointed Tourism Advisory Board at the Ministry of Tourism Development and Christian Religious Affairs.

Jayawardena who was appointed to head the Tourism Advisory Board on Friday, said that any immediate increase in tax will also adversely affect the industry as most rooms had already been sold for next year based on the current tax structure. He said any tax increase should become effective after a one year grace period.

This been the bane of the industry in the past, he said.

“The need of the hour is stability through consistent policies that do not change every year. Red tape must be minimized. It takes only five days for a new hotel project to be approved in Oman. We take months. This aspect needs to be addressed,” he said.

The new committee members too endorsed this and said that there was talk of reintroducing BTT in place of VAT and if this was done it would deal a massive blow to the industry. They called on the government not to change the present tax structure as it would impede growth. The Minister assured the committee that he would convey their concerns to the Prime Minister, who was the minister in charge of policy.

The other key issues that were discussed by the board were the stabilization and regularizing of room rates and bringing the informal hospitality sector into the mainstream.

The board hopes to meet regularly.

The meeting which was chaired by Minister John Amaratunga was attended by all the newly appointed board members. Harry Jayawardena was appointed Chairman of the board.

The board members who represent the biggest names in the travel and tourism sector in the country hailed the decision of the Minister to move away from past practice and work with the industry.

Welcoming the board members, Minister John Amaratunga said his main goal was to make tourism the number one foreign exchange earner in the shortest possible time.

The Minister drew attention to the crisis in the Middle East where Russian tourists have been debarred from travelling to the region.

“Problems in Tunisia, Libya, Egypt, Syria, Morocco, Yemen and Iraq have effectively shut the door to tourists and no insurance company will issue a policy to passengers travelling to these countries. Therefore, it is the right time for Sri Lanka to move forward and grab the opportunity. Now Saudi Arabia is also in turmoil. The only available option for Russian tourists is to travel to our part of the world, where there is freedom, peace, sun and sea, which the Russians love,” he said.“ The world is our market right now. We are in a strong position as there is a steady government and friendly policies,” the Minister said.

The Minister said that to fill up hotel rooms and strengthen the industry, a long term policy was needed.

Others present at the inaugural meeting were Ministry Secretary Janaka Sugathadasa, Chairman Tourism Development Authority and Acting Chairman of the Tourism Promotions Bureau, Paddy Withana, Advisor to the Ministry, Felix Rodrigo and travel trade representatives Merril Fernando, Ajith Gunawardena, Amal Cabraal, Dammika Perera, Udaya Nanayakkara, Sunil Dissanayake, Ms. Shiromal Cooray, Ashroff Omar, Abbas Esufally, Sanjiv Gardiner and Suren Ratwatte.

Advisor to the Ministry of Policy Planning, Dinesh Weerakkody also attended the meeting.