• New framework will offer incentives based on investment value and sector, building on recent Port City tax holidays
• Govt. confident in driving growth through tailored foreign direct investment concessions, with a long-term act expected this year

Sri Lanka will introduce a very clear tax structure of investments which will be based on the investment value and the sector of investment, Industries and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe said.

Speaking to TVDerana on Monday (28), he said that with the recent grant of tax holidays for four investments in Port City, there is an expectation these incentives will be given to other investments as well.

He said the government was able to point out to the International Monetary Fund (IMF) that incentives for investments are required to drive growth, and was able to get the incentives to the port city investments.

According to the gazette issued recently, Ceylon Real Estate Holdings (Pvt) Ltd., Clothespin Management and Development (Pvt) Ltd., IFC Colombo (Pvt) Ltd., and ICC Port City (Pvt) Ltd., will be completely exempt from all taxes on income, dividends, and gains for the first 25 years.

Additionally, payments made during this period will not be subject to withholding tax. Following this, the companies will benefit from a 50% reduction on the prevailing corporate tax rate for a further 10 years.

“Going forward, there will be a very clear tax structure for investments in Sri Lanka, based on investment thresholds and investment areas, there will be incentives provided especially for foreign direct investments,” Abeysinghe said.

Moreover, he said that the Ministry of Industries is looking at getting particular concessions for local industries as well.

He added that it is a matter of us taking a particular portion of revenue, which is due to the government, where the Ministry of Industries has to counter the income generated and jobs created for the economy.

Further, he said that there will be a long-term governing act for investment promotions that will come within the year.