Business

Treasury to take over Tourism Development Levy?

Stakeholders of the tourism industry voiced their concerns on Friday (28) about speculation that the Tourism Development Levy (TDL) would be taken over by the Treasury through the upcoming 2019 Budget.
An official of the Ministry of Tourism and Christian Affairs said that neither the Ministry nor the industry, including the Hotels Association of Sri Lanka (THASL) and Sri Lanka Association of Inbound Tour Operators (SLAITO), were consulted on this matter. According to the official, all stakeholders fully oppose the move and are of the view that it would lead to the industry crashing due to a lack of funding.
No official word from the Ministry of Finance has been heard on putting this move into action so far, according to the Hotels Association of Sri Lanka (THASL).
However, its President Sanath Ukwatte said that the Tourism Development Levy has contributed immensely to the strengthening of the public-private partnership in the tourism sector, and that such a move would defeat the original purpose of the levy.
“Sri Lanka Tourism Promotional Bureau (SLTPB), Sri Lanka Institute of Tourism and Hotel Management (SLITHM), and Sri Lanka Tourism Development Authority are three agencies that are set up in order to effectively manage the tourism industry through a private-public partnership. In order to fund these agencies and to strengthen the tourism industry, the tourism development levy was introduced.”
The potential aftermath of the levy being taken over by the Treasury was described by Ukwatte as “a very serious matter”. He said the public-private partnership will be drastically interrupted if the TDL is directed to the Treasury.
The levy has been distributed among these public and private agencies for the betterment of the industry and to intensify the public private partnership between institutions in the sector.
The levy was introduced in 2003 with the intention of improving destination marketing, manpower training, regulating institutions, and licensing the personnel in the tourism sector, but the levy being taken over by the Treasury will disrupt the intended outcomes, according to Ukwatte.
“I hope the Government is not going forward with this arrangement. None of us in the tourism sector is in favor of this kind of move where our funds go to a consolidated fund.”
Repeated attempts to contact Sri Lankan Association of Inbound Tourism Operators (SLAITO) to get their point of view on this issue were not successful.
The TDL was introduced in September, 2003 by the Ministry of Tourism development with the consultation of the Ministry of Finance as a means of raising funds towards developing and promoting Sri Lanka tourism. The levy is charged from organisations licensed under the Tourist Development Act No. 14 of 1968. The licensed organisations pay the TDL at a rate of 1% on total turnover after deducting Value Added Tax (VAT) and Service Charges. Tourist hotels, travel agents, and tourist shops are listed as eligible parties to pay the levy by the Sri Lankan Tourism Development Authority (SLTDA).