Sri Lanka investment chief says to ensure fair play in concessions
ECONOMYNEXT – The head of Sri Lanka’s investment promotion agency said they would ensure fair treatment to all investors with the Treasury no longer having the discretion to grant tax concessions.
Upul Jayasuriya, chairman of the Board of Investment, said the agency had reverted to regulations under Gazette No. 1469/ 35 of November 2, 2006 with the ending of tax incentives granted in last year’s budget.
This was to ensure continuity of investments and avoid confusion that had arisen after tax proposals introduced in the November 2014 budget ended by 31 March this year, until new laws are drafted following the election of a new government after the August parliamentary polls.
Jauasuriya said the government formed after the January presidential polls which ousted the Rajapaksa regime had given confidence to investors by restoring rule of law and ensuring fair and equal treatment to everyone.
“Investors are not necessarily seeking tax holidays in Sri Lanka,” Jayasuriya told a forum. “What they want most is a stable government and stability in their investments. It’s investment protection that’s expected of a regime.”
All investment incentives would now be granted by the BOI unlike under the Rajapaksa regime where the Treasury got involved in giving concessions to investors.
“We have a country now where everyone is considered equal. There’s no instance where we give or refuse to give tax exemptions on criteria other than merit,” Jayasuriya said.
“Earlier, to get most approvals and exemptions, investors had to go to the Treasury, though there was no legal framework supporting that.”
The Rajapaksa regime had damaged investor confidence by seizing companies under a controversial law to take over what were called underperforming enterprises and also changing foreign land ownership laws.
“No investor would like to be treated in a discriminatory way,” Jayasuriya said. “Where factory investments are concerned, no country offers different terms to locals and foreign investors.”
But concessions granted under a controversial Strategic Development Projects law by the former regime would continue, Jayasuriya said.
“Whatever has been granted Strategic Development status will continue. Those approvals will continue to enjoy facilities granted which are monitored by the BOI. But the new government has decided not apply it in future except for very compelling reasons.” (Colombo/August 3 2015)