Minister admits seizing funds voluntarily collected by the hotels unfair
By Chandeepa Wettasinghe
Sri Lanka’s long-overdue major promotional campaign may be delayed until 2017 due to the budget proposal to abolish the Tourism Development Levy (TDL) and seize the Rs.2 billion collected through it for promotional purposes.
The crisis was brought to the attention of Tourism Development and Christian Affairs Minister John Amaratunga last week, and he said that the matter would be brought to the attention of the Cabinet.
“How can I lobby? It is a government budget, so I cannot criticize it.
The money will go into the consolidated fund,” Amaratunga told Mirror Business yesterday when asked of the progress in this regard.
The budget had abolished TDL citing a simplification of taxes, and the THASL members’ fears that the funds would be absorbed into the Treasury have now been realized.
“We’re trying to give them some part of the Departure Tax for next year—maybe US$5 from the US$30. But even that is not sufficient. For spending, we’ll have to go beg from the Treasury in 2017,” Amaratunga said.
The majority of the fund had accrued from all establishments registered under the Sri Lanka Tourism Development Authority paying 1 percent of their monthly turnover.
Industry associations had lobbied the government in 2003 to enact TDL, so that the tax payer will not be burdened with the spending of the industry.
“All these years, the Ministry and the boards were surviving on their own without burdening the tax payer, unlike other ministries,” Amaratunga concurred.
Funds in excess had been saved for promotional purposes, and the industry was gearing up for a massive promotional drive this year, after the fund had accumulated Rs.2 billion.
Tourist Hotel Association of Sri Lanka (THASL) recently said promotional campaigns must go ahead this year and without the promotional fund, the process would be delayed if the industry has to beg the Treasury for money.
Amaratunga admitted that seizing the funds which were voluntarily collected by the hotels as a service for the country is unfair.
The Sri Lanka Tourism Promotions Bureau has lined up four large tenders since last year. However, the past government had not allowed the industry to spend the Rs.2 billion.
The initial tender worth Rs.200 million was opened this year, but was closed by Amaratunga when he took over office in September, citing irregularities in the tender process.
He had last week called for a fresh opening of the tender.
Sri Lanka has attracted 1.59 million tourists for the 11 months this year, growing 20.4 percent year-on-year. The target for 2015 is 1.8 million tourist arrivals, while the target for 2016 is 2.5 million.
The country’s tourism brand is non-existent, having gone through a rapid cycling of different brands over a short number of years due to policy weaknesses.
The industry is also divided over the type of tourist the country should attract, which makes a definitive promotional campaign crucial to drive past the current juncture and achieve the government’s arrival targets.