Government pursues AI solution to recover lost tourism taxes from unregistered accommodations

The government is moving to deploy advanced AI technology to combat revenue losses from unregistered accommodation providers who conduct business through online travel agencies (OTAs) without proper licensing or tax compliance.

Unregistered guest rooms operating via OTA platforms represent a substantial leak in tourism-related taxation and regulatory oversight. By channeling bookings through digital platforms, many operators circumvent official registration requirements and commission payments that should flow to government coffers.

The proposed AI-based system would systematically identify and track transactions from unlicensed accommodation providers, enabling authorities to recover lost commission revenues and enforce compliance across the tourism sector. Officials believe the technology can cross-reference OTA booking data with government registration records to pinpoint non-compliant operators.

This initiative reflects broader government efforts to formalize Sri Lanka's tourism economy and ensure equitable tax collection across the industry. The move targets a longstanding regulatory challenge as the rise of digital booking platforms has made it increasingly difficult for authorities to monitor informal accommodation operators.

Implementation of such a system would require coordination between tourism authorities, revenue departments, and OTA platforms operating in Sri Lanka to effectively close the compliance gap.