The cost to obtain a short-term visa to visit Sri Lanka rose from $50 to $100 in April, sparking a dispute over the reasons behind the price hike.

Transition to e-Visa System

The price increase coincided with Sri Lanka’s transition from using internal Electronic Travel Authorizations (ETAs) to an e-visa system operated by the visa processing company VFS Global. This change was initiated to address frequent hacking issues on the previous ETA system, according to Sri Lanka’s Tourism Minister Harin Fernando.

Dispute Over Price Hike

Fernando attributed the price increase to a “technical issue,” stating that VFS Global “missed out” on offering 30-day visas when it began processing visas for the country on April 17. However, VFS Global responded that the visa categories were introduced as per the directives of Sri Lanka’s Department of Immigration and Emigration (DI&E).

Both parties confirmed that the 30-day travel visas, priced at $50, were reinstated on May 7. VFS Global noted in an email to CNBC that the DI&E reintroduced the 30-day visa category for all nationalities on this date.

VFS Global's Fees

The decision to move away from the ETA system to VFS Global was driven by security concerns and the need for a reputable global company. VFS Global, which operates in more than 150 countries and works with 67 governments, was selected. However, VFS Global’s fees, which local media reported to be around $25 per visa, have sparked anger in Sri Lanka’s travel industry and led to corruption allegations from opposition leaders.

VFS Global stated that service fees are approved by all governments and are determined based on factors such as the scope of engagement, application volume, resource, and infrastructure costs. For example, the service fee for Schengen countries can go up to a maximum of 40 Euros. For Sri Lanka, the fees have been reduced, with the government keeping $40 and VFS Global charging $10 for 30-day visas.

Free Visa Policy and Associated Charges

Citizens of seven countries, including India, China, Indonesia, Japan, Malaysia, Russia, and Thailand, are eligible for free visas to enter Sri Lanka. VFS Global emphasized that the 30-day free visa for these nationalities is valid for travel until May 31, 2024. However, applicants from these countries still need to pay VFS Global’s processing fees, which has led to debates about whether Sri Lanka should continue using VFS Global’s platform.

Future Visa Policies

Sri Lanka’s “free visa” policy differs from the “visa-free” agreements enacted by many Asian countries, which exempt travelers from needing a visa altogether. Under Sri Lanka’s policy, visas are still required, but the government does not charge for them.

Sri Lanka is considering expanding its “free visa” list to include 60 more countries. Pre-Covid, over 40 countries were on the free visa list. A government-appointed committee is expected to make a decision on this within 30 days. Fernando assured that a comprehensive visa policy will be in place very soon.

Broader Implications and Industry Reactions

The recent changes in Sri Lanka’s visa policies have broader implications for the tourism industry. The increased visa costs could deter potential tourists, impacting the local economy, which heavily relies on tourism. The move to VFS Global, while aimed at improving security, has faced backlash due to the additional processing fees. These fees have sparked debates about the transparency and fairness of the new system.

Potential for Future Adjustments

Given the ongoing debates and industry reactions, there is potential for further adjustments to Sri Lanka's visa policies. The government may need to strike a balance between ensuring security and maintaining an attractive proposition for tourists. Continuous feedback from the tourism industry and travelers will likely play a crucial role in shaping future policies.