SLRA Applauds Govt.’s VAT Refund Scheme – Establishing Retail as Key Player in the Economy

The Sri Lanka Retailers’ Association (SLRA) applauds the recent announcement by President Anura Kumara Dissanayake approving the VAT refund program for tourism. This significant policy reform is a crucial step towards positioning Sri Lanka as a leading retail tourism hub in the region, enhancing its appeal to high-spending international travellers while boosting economic growth.

    

Retail tourism contributes approximately 6% of the global travel and tourism sector’s direct GDP and is pivotal in enhancing tourist experiences and increasing foreign exchange earnings. According to the World Travel and Tourism Council, Sri Lanka experienced a 12.8% growth in retail tourism GDP contribution between 2010 and 2019, ranking it among the fastest-growing retail tourism destinations globally. By leveraging its strategic location, cultural diversity, and unique shopping experiences, Sri Lanka has immense potential to become a preferred shopping destination in the Asia-Pacific region.

Introducing a VAT refund program aligns Sri Lanka with leading global shopping destinations such as Singapore, Thailand, and Dubai, where tax-free shopping incentives have proven effective in attracting high-value tourists. This initiative is expected to significantly contribute to the country’s tourism revenue target of USD 8 billion by 2030. With retail tourism projected to become a billion-dollar industry in Sri Lanka, this policy change will boost key sectors, including luxury goods, branded fashion, electronics, and gem and jewellery.

“The approval of the VAT refund program marks a pivotal moment for Sri Lanka’s retail and tourism industries,” said President of the SLRA, Charitha Subasinghe. “By removing tax barriers and making shopping more attractive to international visitors, we are laying the foundation for a thriving retail tourism sector that benefits consumers and businesses. The SLRA is committed to working closely with the government and industry stakeholders to ensure the successful implementation of this initiative.”

With the right policies, Sri Lanka can capitalize on the growing global retail tourism trend, driving increased foreign spending, enhancing tourist satisfaction, and creating new opportunities for local businesses. The SLRA remains dedicated to advocating for initiatives to strengthen Sri Lanka’s global retail positioning and ensure sustainable economic growth.