Mangala scraps Sri Lanka anti start up tax
ECONOMYNEXT – Sri Lanka’s finance minister Mangala Samaraweera had got cabinet go ahead to scrap a controversial annual company registration fee, introduced in a budget for 2016, which critics warned would be a tax discouraging incorporation.
The budget proposed an annual tax of 1.5 million rupees for listed companies, 250,000 other public companies and 30,000 for a private company, as part of several other follies of the administration in the first two years, which now has to be cleaned up.
"In line with the policy to promote business start-ups and entrepreneurship towards and enterprising Sri Lanka it is proposed to limit the proposal to introduce the Annual Company Registration Levy in the budget 2016, only to the year for which it was proposed," a note prepared by Minister Samaraweera said.
The fee not only hit start ups but a 250,000 rupee fee also discouraged small family companies and partnerships from becoming incorporated bodies, critics have said.
Incorporated bodies are under the Companies Act are subject to multiple rules and regulations, including accounting, which also benefits the state making tax administration easier.
At the time it cost about 80,000 rupees to start a company, which in Delaware a company can be started for much less analysts have said including secretarial fees.
However there are fees in the US when capital is increased, which applies for bigger corporations. (Colombo/Sep22/2018)