Sri Lanka travel visa costs doubled to $100 last month. The reason for the hike is disputed

The cost to obtain a short-term visa to visit Sri Lanka rose from $50 to $100 in April.

But the reason for it is disputed.

The price hike followed Sri Lanka's transition from using internal Electronic Travel Authorizations, or ETAs, to an e-visa system operated by the visa processing company VFS Global.

Sri Lanka's Tourism Minster Harin Fernando blamed a "technical issue," telling CNBC Thursday that VFS Global "missed out" on offering 30-day visas when it starting processing visas to the country on April 17.

In response, VFS Global said, "Visa categories were introduced as per the directives of [Sri Lanka's] Department of Immigration and Emigration (DI&E)."

Both parties agreed that 30-day travel visas priced at $50 had been reinstated as of May 7. VFS Global, in an email sent to CNBC Monday, said that on this date "the DI&E re-introduced the 30-day visa category for all nationalities."

Sri Lanka's Ministry of Public Security moved away from its ETA system because of concerns over frequent hacking of the website by scammers, Fernando said.

"We wanted to go for a global company which is very reputed," he said.

VFS Global stood out among the options, he said. The company works with 67 governments and operates in more than 150 countries, according to its website.  

But VFS Global's fees angered many in Sri Lanka's travel industry and led to allegations of corruption by Sri Lankan opposition leaders.

The fees — which total some $25 per visa, according to local media — had been disclosed via a contract signed with Sri Lanka's immigration authority on Dec. 21, 2023, a spokesperson from VFS Global told CNBC.

"Service fee charges are approved by all Governments and are determined based on various factors such as scope of the overall engagement, volume of applications expected, resource and infrastructure costs required to fulfil the Service Level Agreements etc," said VFS Global. "For example, in the case of Schengen countries, the service fee for short stay visa can go up to a maximum of 40 Euros."

But these have been significantly reduced for 30-day visas, said Fernando. Now, Sri Lanka's government keeps $40 and VFS Global charges $10, he said.

Citizens of seven countries are eligible for free visas to enter Sri Lanka.

"It must be noted — that the 30-day, free visa for seven nationalities namely India, China, Indonesia, Japan, Malaysia, Russia, and Thailand were always available and is valid for travel into Sri Lanka up to 31 May 2024," a VFS Global spokesperson said.

However, applicants from these countries still have to pay VFS Global's fees, said Fernando.  

"The government of Sri Lanka won't be charging, but the platform … will," he said. As a result, "We're still in debate, whether we should completely give up VFS."

Sri Lanka's "free visa" policy should not to be confused with the "visa-free" agreements enacted in the past year by many Asian countries. These agreements exempt travelers from needing a visa.

Under Sri Lanka's policy, visas are required.

Sri Lanka is considering adding 60 more countries to its "free visa" list, said Fernando.

"Pre-Covid, we had more than 40 countries on the free visa," he said, adding that a committee appointed by the government will issue a decision within 30 days.   

"We will definitely have a visa policy in place very soon," he said.