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IMF Considering Removing VAT Conditions on Sri Lanka’s Tourism Industry

  • The IMF is reconsidering conditions on the imposition of 18% VAT on the tourism industry in Sri Lanka.
  • The Sri Lanka Association of Inbound Tour Operators (SLAITO) raised concerns about the sudden imposition of VAT on Destination Management Companies (DMCs).
  • The Sri Lanka Tourism Development Authority (SLTDA) Chairman held a meeting with the IMF to request a reconsideration of the VAT condition.
  • The IMF was receptive to the request and said they would take up the concern.
  • The imposition of VAT could result in a loss of 200,000 tourists and $400 million in revenue.
  • The DMCs would be compelled to absorb the 18% VAT, as rates given to tour operators overseas did not include it.
  • The industry plans to include the VAT in tour quotes from November onwards.
  • The late announcement of the removal of the VAT exemption makes it difficult to change tour package rates.
  • The industry may have to curtail promotions to manage funds due to the impact of the VAT.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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