SLAITO cautiously optimistic about Budget

By Shehana Dain

The Sri Lanka Association for Inbound Tour Operators (SLAITO) yesterday hailed the Budget, while urging the Government to look into some adversely-affected areas during implementation.

In a statement SLAITO, which is the apex body of inbound tourism in the country, said: “One of our big concerns is the removal of the TDL (Tourism Development Levy). We are very confident that the Finance Minister will address this concern and find a remedy to fund tourism promotions effectively in order to carry out the plans of SLTPB effectively to be competitive internationally.”

SLAITO President Devindre Senaratne told the Daily FT that the need of the hour was a proper marketing and branding plan. “For quite some time the marketing campaign was funded by the TDL and now it has been abolished completely. If a move of such nature is taken, it would be most welcome also to propose how the Government plans to fund the promotional activities thereafter. The sooner it is, the better.”

Budget proposals also include an increase in taxing the tourism industry by means of Corporate Tax and Nation Building Tax. Senaratne backed the decision, noting that the new proposals were reasonable when the benefits given were looked at collectively.

“We understand the country’s tax revenue has to be streamlined and improved. Therefore the tax increases posed on us are reasonable and manageable. However we request the Government to cooperate with us and offer us a grace period until 31 October next year as we have already signed contracts with tour operators till then.”

Moreover, he said that most contracts related to the hotel industry are signed nine to 12 months in advance and sudden changes to the contracts already signed would signal not-so-favourable outcomes.

“The contracts that have already been signed are with foreign parties who do not know of prices and conditions that would follow after the Budget. So if we don’t get a grace time period we will have to bear the additional cost. When the industry went through a similar phase before, we got approval for a grace period; we hope for the best this time around as well.”

Among other proposals it was mentioned in the Budget that 3,000 youth would be trained every quarter in the hospitality industry and Rs. 100 million would be provided for this purpose. A tax concession of 50% was granted for companies which specifically engage in MICE (Meetings, Incentives, Conferencing and Exhibitions) tourism. It is also mandatory for all hotels to register under the Tourism Development Authority by 1 June 2016 and import duties were removed on caravan carriages, yachts, surfing equipment, speed boats and mini cruise boats.

Senaratne is confident that the new economic, social and other reforms that are proposed will develop the tourism sector in the country while attracting FDI to the tourism industry.

“We thank the Finance Minister for considering tourism as an important industry by identifying and agreeing that the country’s branding and major international promotions are necessary. Allocating funds for training tourism personnel, making Sri Lanka an attractive shopping destination and investing in the MICE industry while also offering incentives would definitely make an impact on the industry including FDIs. We also welcome the assurance given to regulate unlicensed travel operators.”