Finance and Media Minister Mangala Samaraweera yesterday (11) spoke at the opening of the Tourist VAT Refund Scheme (TVRS) at the Bandaranaike International Airport (BIA).
The Minister emphasized that tax collection has been one of the biggest challenges faced by the government and the government has made important improvements in tax collection and compliance.
“At the same time, we are acutely aware of the importance of ensuring that taxation is fair, convenient, and as non-distortive as possible,” he added.
The Minister further stated that the government will always give priority to the development of strategic industries and it will be done in a rules based manner, as opposed to ad-hoc incentives that have led to corruption and tax leakage in the past.
The Minister noted that sectors such as tourism, exports, IT, education and agriculture have been provided significant concessions through the Inland Revenue Act.
“The TVSR will enable Sri Lankan goods to have greater exposure to the global market, bringing with it several positive economic spill overs,” he added.
The Minister further stated: “Today most tourists tend to bypass Colombo for attractions outside of the capital city. But with the opportunity for VAT free shopping, tourists will have more reason to spend time in Colombo. Trends in other cities show that tourists that visit destinations for the sole purpose of shopping tend to spend significantly more than their counterparts that visit the rest of the country and they tend to stay at the destination longer than traditional tourists. Therefore, I believe that this would be the first step in unlocking a major potential for Sri Lanka.”