Sri Lankan government mulls investment relief to identified sectors to encourage inflow of funds
A Sri Lankan government minister has reportedly said that a package of investment relief to identified sectors aimed at encouraging the inflow of funds held abroad is being planned to push investments in to the country.
“There is a tax phobia in this country, which is holding back investments,” Sri Lanka’s Minister for ICT, Higher Education, Technology and Innovations, Bandula Gunewardene has told the media before assuming his Cabinet portfolio.
“We want to free people from that phobia that and encourage investments. That are multiple taxes now such as capital gains taxes and high income tax rates that are discouraging investors.
“Investments were first discouraged with the retrospective taxes in 2015 and more were added later,” Gunewardene has been quoted as saying.
He has further noted that among areas that are being planned for relief are agriculture, machinery, transport, construction.
The local media has reported that although the last administration had promised to simplify and reduce the number of taxes, under an International Monetary Fund (IMF) backed programme, a number of withholding taxes, which brought little revenues but alienated many were imposed.
Sri Lankan President Gotabaya Rajapaksa’s election manifesto has proposed multiple changes to the tax regime.
OSL take:
The government of Sri Lanka is committed to increase the inflow of foreign direct investments to the country. While the previous government took many steps to promote investments the newly appointed government is also looking at new methods to promote investments. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as the trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
| Article Code : | VBS/AT/20191125/Z_1 |