The tourism industry has welcomed the Government’s recent decision to allow registered hotels to accept foreign currency from resident Sri Lankans as payment for services.
On 26 March, the Government published a gazette under the Foreign Exchange Act No.12 of 2017 by Mahinda Rajapaksa in his capacity as Finance Minister. It permits any hotel registered with the Sri Lankan Tourism Development Authority (SLTDA) to deal in foreign exchange within Sri Lanka and to accept foreign currency from persons resident in Sri Lanka who have foreign currency in their possession.
“Tourism industry is the most impacted by the COVID-19 pandemic. The move is helpful for our members in these trying times and especially for members that had obtained loans in dollars,” THASL President Sanath Ukwatte told the Daily FT.
He also described the move as another step towards recognising tourism as an export industry.
“We are Sri Lanka’s third largest earner of foreign exchange and second biggest export industry according to the Central Bank. However, unlike in other countries, in Sri Lanka, for national accounting purposes, tourism is regarded as an invisible export. We hope that after many requests, the Government has finally recognised tourism as an export industry,” Ukwatte added.
SLAITO said the new gazette made an exception to accept foreign currency from Sri Lankan residents.
“The Gazette enables Sri Lankan residents to transact in foreign currencies at hotels. This allows people having dollars in their possession to be circulated to the mainstream via banks,” SLAITO President Thilak Weerasinghe told the Daily FT.
He said all tourist hotels registered with SLTDA already hold licences to accept foreign currencies even before the gazette was issued.
According to the gazette, the foreign currency so accepted, shall not be retained in possession of hotels, for a period exceeding seven days from the date of the acceptance, without; (a) depositing into a Business Foreign Currency Account opened and maintained with an authorised dealer or restricted dealer, in the name of the respective hotel; or (b) selling to an authorised dealer, upon submitting evidence to such effect.
(FT)