Sri Lanka Port City Economic Zone workers to earn tax free, dollar salaries
ECONOMYNEXT – Employees working for companies within ‘Colombo Port City Special Economic Zone’ in land reclaimed by a China-based firm will get tax free dollar salaries, according to a draft law to be presented to parliament.
Any foreigner or resident (an authorised person) who want to start a business within the Port City boundaries will first have to get a license and business registration from the Colombo Port City Economic Commission which will run zone.
The firms can then employ a foreigner or a local who has to be paid in foreign currency.
The workers will not have to pay tax.
According to the draft bill:
35. An authorised person permitted to engage in business in and from the Area of Authority of the Colombo Port City, may employ any person, whether a resident or a non-resident, and such employee shall be remunerated in a
designated foreign currency, other than in Sri Lanka Rupees, and –
(a) any employment income of a resident employee so received shall be exempt from income tax, and shall
be deemed to be a permissible credit to a personal foreign currency account of such resident employee;
b) any employment income of a non-resident employee so received shall be exempt from income tax and
notwithstanding anything to the contrary contained in any other written law, such non-resident employee
shall not be liable to income tax in Sri Lanka on any income earned outside Sri Lanka.
A dollarized salary will protect the workers from currency depreciation coming from any depreciation by the central bank.
The Colombo Port City Zone is expected to draw foreign businesses to its commercial area and residents to the residential area.
The Commissions Chairperson and Board will be appointed by the President of Sri Lanka. (Colombo/Mar28/2021)