Sri Lanka confirms tax breaks for expanded China Port City
ECONOMYNEXT – Sri Lanka’s has confirmed tax breaks for an expanded China Port City, originally promised by the ousted Rajapaksa regime, under a law which the current administration has said it will not use in the future.
Sri Lanka is giving a 25-year income tax holiday to CHEC Port City Colombo (Pvt) Ltd, a project company that reclaim 269 hectares of sea by the main waterfront of the capital Colombo, a gazette notice issued on September 19 said.
The original project was only 233 hectares when it was suspended by a new administration that came to office in 2015 and was given the formal go ahead in August 2016.
Material imported by the project company or contractors will be exempted from value added tax, ports and airports levy, excise duty, import cess and nation building tax.
Thirty expat workers will also be free from income tax at any time. Each worker will get up to a 10 year tax free period.
The main promoter, China Harbhour Engineering Company (CHEC) will also be entitled a series of tax breaks.
CHEC will also get an 8-year exemption on profits generated from the project. The period of March 06, 2015 to August 12, 2016 will not be counted for the eight years.
The project was suspended until August citing environmental concerns. It is not clear whether new eco-studies have been conducted for the expanded size of the project.
The tax breaks comes as Sri Lanka is taxing healthcare at 15 percent from ordinary private citizens. (Colombo/Sept25/2016)