Sri Lanka to end 15-pct stamp duty on land leases to foreigners

ECONOMYNEXT – Sri Lanka is to abolish a 15 percent stamp duty on foreigners leasing land in an effort to encourage foreign investment in the island, the head of the investment promotion agency said.

The stamp duty introduced in November 2014 discouraged foreign investment and created a bad image, said Upul Jayasuriya, chairman of the Board of Investment.

“The imposition of unequal treatment to foreigners on land lease was not a step in the right direction.”

Sri Lanka’s Bar Association, which Jayasuriya also headed, challenged the administrative ‘circular’ imposing the stamp duty.

“The Bar Association challenged the circular, saying you can’t charge stamp duty by circular. We thought they would drop it but they went and changed the law,” Jayasuriya said.

“This has to be corrected and it will be corrected,” Jayasuriya told a forum organized by the Sri Lanka – Germany Business Council of the Ceylon Chamber of Commerce.

A policy announcement is expected soon, he added.

“That has created a huge problem including for those public quoted companies where if foreign ownership is beyond 49 percent you are liable to pay stamp duty.”

The November 2014 law limited foreigners to 99-year leaseholds, ending the outright purchases of land allowed earlier, and introduced a special stamp duty of 15 percent of the leasehold price. (Colombo/October 20 2015)
 

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