Sri Lankan government to reintroduce tax concessions to boost FDIs
The of government of Sri Lanka has reportedly stated it would re-introduce tax concessions to boost Foreign Direct Investments (FDIs) as well as renegotiate all existing and proposed bilateral and investment agreements.
“We will structure Sri Lanka to be comparatively advantageous for any investor, and reintroduce tax concessions for investors looking at investment opportunities in the country,” Sri Lanka’s Investment Promotion State Minister Keheliya Rambukwella has told the media.
The Minister has said they hope to renegotiate all bilateral agreements including the Hambantota Port deal with China, the Free Trade Agreement (FTA) with Singapore, the Economic and Technology Co-operation Agreement (ETCA) with India, and Millennium Challenge Corporation (MCC) Compact with the US.
“We made many comments and submissions to Parliament on some of the areas of these agreements, which were seriously disadvantageous to Sri Lanka. We need to revisit and renegotiate all of these, and I hope the international community will look at it in the right spirit, and perhaps turn it around to be a win-win agreement where both countries benefit,” Rambukwella has said.
He has further noted that irrespective of the size of the economy, any agreement signed between two sovereign nations should be given the same status, and it has to be a win-win treaty.
The Minister has also noted that trade agreements are not bad tools and that the Sri Lankan government will forge ahead with the FTA with China next year, while outlining that FTAs are a great mechanism to attract much-needed foreign exchange to the economy, but that it must be dealt professionally.
According to Rambukwella, the government was keen to draw foreign individual investments (FIIs) through the stock market in the short-term.
OSL take:
The government of Sri Lanka has given priority to attracting foreign direct investments with special attention being paid to foreign individual investments. The move to re-introduce tax concessions would undoubtedly be a catalyst in attracting foreign investments to the country. 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 trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
| Article Code : | VBS/AT/06122019/Z_1 |