Sri Lanka to ease land issues for investors
View(s):Sri Lanka government is reviewing existing laws on state-owned lands to broad-base ownership, relax the land use ceiling and remove restrictions on foreigners buying land. A new draft bill is now being prepared with the aim of providing provisions to provide ownership of land without being affected by the Land Restriction and Alienation Act.
Local and foreign investors as well as entrepreneurs will be encouraged to expand their businesses clearing impediments in obtaining land and buildings under the government’s mid-term economic plan.Restrictions on foreigners, companies and locally incorporated firms with over 50 per cent foreign ownership from buying land in the country will be removed.
Foreigners (individuals or companies with foreign shareholding of 50 per cent or more) could purchase land but with a huge transfer tax (100 per cent) since 2004 but this was removed by enacting New ‘Land (Restriction on Alienation)’ bill in parliament in 2014.
Finance Minister Ravi Karunanayake recently assured the Government would be flexible on foreigners and land ownership subject to pre-determined purposes of investment. Meanwhile the present land use ceiling of 50 acres per individual will be increased to 250 acres under the provisions of the new bill which will be presented in parliament next month, a senior government official told the Business Times.
The Land Reform law of 1972 placed a ceiling on individual ownership of land at 50 acres. It has resulted in the vesting with the state of around 560,000 acres of land under this law. In 1975, around 500,000 acres of land owned by local and foreign companies were nationalised. But it has failed to enhance their productivity levels and develop competitiveness due to politicisation of administration and management, he said adding that most of the state-owned plantation companies were running at a loss.
The government plans to provide unutilised plantation lands and state-owned barren lands to private firms and business entrepreneurs to start viable commercial and agricultural projects creating more employment opportunities for rural youth, he added. The previous government had attempted to acquire 25,000 acres of unused estate land and distribute it among youths for ‘productive agricultural purposes’ under the 2013 budget proposal.
A decision was taken at that time to distribute two acre blocks of land each in plantations among 12,500 unemployed youth but the government was unable to implement the plan due to protests of plantation companies. Under the new initiative these plantation lands will be allocated for productive purposes without just handing it over to the people considering their political affiliations.
The state land will be provided for investors who will step in to construct housing schemes for the middle class in rural, urban and semi –urban areas within the next five years.