Sri Lanka tax breaks for companies leasing state land
ECONOMYNEXT – Sri Lanka’s government has decided to give tax relief that benefit mainly small and medium enterprises which lease commercial land owned by the state under the Mahaweli River irrigation scheme, a government spokesman said.
In renting state lands for commercial enterprises, the tax rate remains high, causing difficulties to small and medium scale entrepreneurs, Mass Media Minister Gayantha Karunathilake told a news conference.
Tax is charged according to market value calculated by the Chief Assessor and the tax rate increased 50% every five years for lands leased for 30 years on long-term lease schemes, under the State Lands Ordinance.
The Cabinet of Ministers this week approved a proposal by President Maithripala Sirisena, in his capacity as Minister of Mahaweli Development and Environment, to prepare a concessionary taxation method for leasing state lands.
Almost a billion rupees in arrears has accumulated on lease payments from settlers in the Mahaweli scheme as the government has found it difficult to make recoveries.
President Sirisena has proposed that only 20% be added to the existing lease at the time of revision every five years, instead of 50% and to scrap the present practice of charging three instalments at the start of a long lease. (COLOMBO, July 28, 2016)