Volkswagen gets 8-yr tax holiday for US$26.5mn Sri Lanka plant
ECONOMYNEXT – Sri Lanka’s government said a Volkswagen assembly plant to be set up in the island with an investment of 26.5 million US dollars will get an eight year tax holiday and initially make cars for the local market.
The German firm which this year overtook Toyota as the world’s largest carmaker by sales will assemble diesel-powered vehicles in the 1,000cc to 2,000 cc category, the Board of Investment said in a statement.
BOI chairman Upul Jayasuriya signed an agreement for the factory with Noel Selvanayagam, President of Senok Authomobile (Pvt) Ltd., sole agents for Volkswagen in the island.
The plant will assemble passenger cars, sport utility vehicles (SUVs), multi utility vehicles (MUVs) and commercial vehicles.
“Initially the vehicles would be marketed locally for three years and thereafter vehicles manufactured will be exported to overseas markets,” the BOI said.
It said there is also potential for export vehicles which would be petrol, electric or hybrid o be built without the concessions that have been given for assembling diesel vehicles.
BOI chairman Upul Jayasuriya said that of the total project value 21.5 million US dollars would be foreign direct investment and the balance five million dollars would be a loan.
The assembly plant, to be set up in Kuliyapitiya, in the North Central Province, will be operational within a period of 30 months. (Colombo/August 13 2015)