Govt announces debt relief for tourism sector

May 08, 2019 (LBO) – Sri Lanka’s government and cabinet yesterday gave a heads up for a ‘relief package’ to strengthen the tourism industry affected by the Easter Sunday attacks.

“The Central Bank is now in the process of issuing circulars in this regard to banks,” State Minister for Finance Eran Wickramaratne told reporters in Colombo, Tuesday.

He said a moratorium will be announced with regard to the tourism sector and that tax concessions among wide range of measures to revive sector are among them.

“Capital and interest falling during the moratorium period would be converted into a term loan which should be recovered from July 2020 and charged a concessionary rate.”

Interest subsidy on Tourism loans registered on or before April 18, 2019 and granted before March 31, 2020 under “Enterprise Sri Lanka”, will be borne by the government.

Due to several requests from the industry working capital loans would also be provided with the repayment period of two years.

“This will have 75 percent interest subsidy borne by the government from the effective interest rate until March 31, 2020.

The interest will be at 3.4 percent as the government is giving a 75 percent interest subsidy.”

The minister also said that VAT on tourism sector too has been revised from 15 percent to 5 percent on hotels and tour operators registered with SLTDA from April 1, 2019 to March 31, 2020.

Under the Enterprise Sri Lanka Loan Schemes (Jaya Isura and Green Loan) over 15 billion rupees has been already dispersed for tourism development projects.