Anomalies in tax concessions affect tourism industry

COLOMBO (News 1st) - Certain institutions operating in the tourism industry claim there are several anomalies in the recently introduced tax concessions. Tourism is the third-largest foreign exchange earner in the country. Sri Lanka recorded its highest ever number of arrivals in 2018 with over 2.3 million tourists coming into the island and earned nearly US$ 4.3bn in 2018. Following the attacks in April last year, tourist arrivals declined by 70.8% in May 2018. Though there has been a steady growth in tourism arrivals to Sri Lanka, industry officials claim Sri Lanka could have expedited its recovery process, if the country focused more on overseas promotion. Mahen Kariyawasam, President of Lanka Association of Inbound Tour Operators: "We feel that the tourism sector is picking up very slowly, after the April attacks. One of the reasons for this is, we have done enough promotion or any recovery plan as such in the past few months. Right now what we must do is more promotion, especially overseas, to consumers. I'm sure with the new board that has been appointed and the new government thinking we should be able to achieve this soon. Another issue we are having right now is the fact that inbound tour operators have not been recognized through the gazette notification that was issued by the government making VAT zero-rated. We discussed this with the ministry of finance last week, hope things will be resolved soon. CNN Travel has selected Sri Lanka as one of the best places to visit in 2020 and last year Lonely Planet ranked Sri Lanka as the number one travel destination. However, when compared with 2018, annual tourist arrivals fell 18% to 1.9 million tourists in 2019, from a previous 2.4 million tourist arrivals. During 2018, India topped Sri Lanka’s tourism market, with the UK coming in second, and China coming in third. Germany, Australia, France, Russia, the USA, Maldives, and Canada make up the top ten source markets. Experts believe that they need to diversify markets. They add that although the tourism industry is expected to continue to grow, poor planning and management of this growth and limited diversity of markets and products contribute to a lack of value-adding opportunities. They further added that the country is missing opportunities to increase investment and jobs and to use tourism revenues to conserve the environment and sustainably support communities in all parts of the island. Tourism in Sri Lanka has always been a story of untapped potential. Will this story be the same in another five years. While we certainly hope it would not, many are confident that the tourism industry will fully recover this year.