No decision to award 40-year tax concession to Port City investors – MoF

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The government has not yet taken any decision with regard to granting a 40-year tax concession to investors at the Colombo Port City, Secretary to the Ministry of Finance (MoF) K M M Siriwardana told Finance Today.

Meanwhile, economists point out that such a 40-year tax concession could jeopardise future agreements with the International Monetary Fund.

Cabinet Spokesman Bandula Gunawardena stated at the Cabinet media briefing yesterday that the Cabinet has approved the granting of such tax breaks.

“No decision has been taken so far to grant a 40 year-tax break for the Colombo Port City project. A proposal has been made to the government to attract investors to the Colombo Port City project, but no Cabinet Paper has been submitted regarding the 40-year tax relief,” Siriwardana said.

Sri Lanka is to rebuild the economy via the upcoming interim Budget

However, the Cabinet has approved the Amendment to the Appropriation Act for the year 2022 or present an interim Budget due to the difficult economic situation in the country, since the middle of the first quarter of 2022.

The Government had to incur expenditure on other essential functions in addition to those which had been allocated by the Appropriation Act.

Moreover, the Ministry structure that existed at the time of preparing the Appropriation Act for 2022 has now changed significantly.

Therefore, the government has decided to introduce an Amendment Bill in Parliament to replace the Appropriation Act No. 30 of 2021.

Accordingly the Cabinet has approved the proposal presented by Prime Minister in his capacity as the Minister of Finance, Economic Stabilisation and National Policies to advise legal draftsman to prepare a Bill to amend the Appropriation Act No. 30 of 2021.

Meanwhile, speaking at the Parliament yesterday Prime Minister Ranil Wickremesinghe said, this proposed  interim Budget is the first step in rebuilding the system. “Once we have taken that step, we will implement a modern system and install safeguards that will protect us from future calamities. But to do all this, we need to restart the system.

That is why we are presenting an interim Budget to Parliament on the basis of our future economic plan and road map.

As I mentioned earlier, our hope is that this Budget will lay the foundation for our economy, allowing it to stabilise and recover.

The interim Budget will reduce unnecessary government spending, while controlling other costs. We will also focus on revitalising many areas affected by the crisis. There is an urgent need to focus on many sectors such as the export economy, tourism and construction.

We have also pointed out to the IMF that this time the focus should be on the economically weaker sections of our country. They have agreed on this. We have prepared the interim Budget based on those facts” he said.

By Ishara Gamage