May 07, Colombo: Sri Lanka has introduced a wide range of measures to help revive the tourism industry that was hit hard by the devastating series of bomb attacks targeting churches and luxury hotels in Colombo on Easter Sunday.
Sri Lanka’s Minister of Finance Mangala Samaraweera today introduced a “Relief Package” including a number of tax concessions to strengthen the Tourism Industry affected by the Attacks. The relief package comes as the Sri Lanka Tourism Development Authority released the monthly data on tourist arrivals which declined by 7.5 in the month of April 2019.
Accordingly, a moratorium will be announced by Central Bank of Sri Lanka to tourism sector institutions and individuals, on a case-by-case basis. The moratorium period will be until 31st March 2020 for both capital and interest payments granted to the tourism sector as of 18th April 2019.
Capital and interest falling due during the moratorium period should be converted into a term loan which should be recovered from July 2020 and charged a concessionary rate.
According to the Minister, VAT will be reduced from 15% to 5% on hotels and tour operators registered with Sri Lanka Tourism Development Authority (SLTDA) from 1st April 2019 to 31st March 2020.
Under the Enterprise Sri Lanka loan schemes, an allocation of Rs. 1.514 billion has been made for providing relief for the tourism sector loans under Enterprise Sri Lanka loan schemes.
Tourism sector loans (Jaya Isura, Green Loan etc.) shall also be considered on a case-by-case basis for the moratorium.
The interest subsidy is borne by the government on outstanding credit facilities (both capital and interest) granted to the tourism sector in the performing category as at 18th April 2019.
Borrower’s repayment will start from 1st April 2020 and capital and interest payments falling due during the moratorium can be recovered from July 2020 onwards. Alternatively, the repayment period can be extended for the number of months it was falling due during the moratorium.
Tourism loans registered on or before 18th April 2019 but will be granted before 31st March 2020 under “Enterprise Sri Lanka”, the interest subsidy borne by the government will continue from the granted date.
Tourism Sector can obtain a fresh Working Capital under the Enterprise Sri Lanka with a repayment period of 2 years with a 75% interest subsidy borne by the government from the effective interest rate until 31st March 2020. The interest will be at 3.4% as the government is giving a 75% interest subsidy. The Maximum Working Capital loan amount will depend on the existing Annual Turnover.
Furthermore, imported security equipment will be duty-free except for NBT effective from 7th May 2019 and this will be applicable to all sectors. These security equipment include Handheld Metal Detectors, Walk-through Metal Detectors, Baggage x-ray Inspection Equipment and Vehicle Scanners.