Sri Lanka’s Finance Ministry announces plans to give five year tax exemption to agricultural based SMEs
The Finance Ministry of Sri Lanka has stated that the government is looking at giving a five-year tax exemption to agricultural-based small and medium industries. Also, steps are to be taken to slash income tax rates on processing industries using local agricultural commodities to 14 percent from 28 percent amid a political crisis.
A statement issued by the Ministry has stated that the move is to promote agricultural production in the country for exports and consumption purposes.
The Ministry has also noted that the government has proposed to raise the threshold for the application of Economic Service Charge (ESC) from Rs. 12.5 million per quarter to Rs. 50 million per quarter to help small holder businesses.
“Agricultural income generated specially by the small scale entrepreneurs in the cultivation of any agricultural produce such as tea, spices, coconut, rubber, paddy, fruits, and vegetables (are) to be exempted from income taxation for a period of 5 years,” the Ministry has said.
According to reports, the government has also proposed that expenditure on transition to renewable energy sources including installation of solar panels, in tea, rubber, coconut, rice and other agricultural processing factories is to be recognized as deductible expenses in the computation of taxable profits, the ministry said.
A proposal has been made to introduce some specific measures towards providing incentives that will enable SMEs and small sector business activities to revive rapidly.
The statement has further noted that the Treasury has already been directed to design a package that will support SME entrepreneurs in the short run to be able to access finance and revive their businesses.
The Finance Ministry statement is indicative of the government’s commitment to uplift the country’s agriculture sector. Given the incentives offered to the agricultural SMEs foreign businesses/investors could explore investment opportunities in the agriculture sector. The sector is also engaged in a massive upliftment programme in the agriculture sector.
|Article Code :||VBS/AT/20181127/Z_1|