Hambantota Port development gets tax breaks under strategic development laws

 
Sri Lanka’s Hambantota Port development and transformation project will get tax exemptions and other concessions under the Strategic Development Projects Act.
Minister of Development Strategies and International Trade. Malik Samarawickrama has issued the relevant gazette notification on November 6 in consultation with the Ministry of Finance to grant the strategic investment project status to the Hambantota port.
The project company China Merchant Port Holdings will be getting a 25-year tax exemption and be exempted from the payment of withholding tax for seven years and tax on dividends following approval by resolution of parliament.
Expatriate staff of the project company will also be exempted from PAYE while the company need not pay VAT, PAL, Cess, etc for seven years, according to the gazette.
This comes amidst a decision taken to replace this law introduced by the former government by a new investor-friendly law that will ensure that the country does not suffer revenue loss when incentives are offered to local and foreign investors, a senior official said.
The new proposed laws were expected to have provisions to ensure that the Government did not suffer a revenue loss in offering incentives to investors and the introduction of a monitoring system.
It was aimed at rectifying the shortcomings in the Strategic Development Projects Act. Under the current Act, the state could not earn the anticipated revenue from certain investments which did not create enough jobs or bring in the required tax revenue. (Bandula)