Dec 06, 2020

Sweeping concessions for Financial Centre in Port City Featured

The Finance Ministry will shortly seek Parliament’s approval to pass a wide range of concessions for the Colombo International Financial Centre (CIFC) coming up in the Chinese-built Colombo Port City, the Sunday Times learns.

The concessions would be in addition to those to be granted by the Board of Investment (BOI) to the China Harbour Engineering Company (CHEC) which is due to make an investment of US$ 1,001 million. The agreement is to be signed next week.

These include exemption from the payment of CESS during the project implementation period and exemption of the Port & Airport Development Levy on all items imported for the project for eight years. They also include a 15-year exemption from corporate income tax and a six-year tax exemption on the sale of Apartments. These concessions have been recommended by the Presidential Secretariat.

Another recommendation is that the dividend tax be exempted for 15 years plus one more year thereafter.

Aviation and Export Zones Development State Minister D.V. Chanaka said preparations were underway to sign the BOI agreement and thereafter obtain further concessions through Parliament.

The Cabinet has already decided to grant approval for the CIFC mixed development project under the Strategic Development Project Act.

The Presidential Secretariat has recommended that a license be granted to operate a duty-free complex in an area of 10,000 square meters. The complex will consist of retail outlets selling reputed international brands.

The BOI has recommended that the PAYE Tax/Personal Tax be exempted for 15 expatriate staff for five years, but the Presidential Secretariat has recommended that during the project implementation period upto a maximum of 30 expatriate staff be given the exemptions. However, the BOI has noted that for all other SDP agreements the exemption is five years.

Of the Port City investment of US$ one billion, the cost of the land will be US$ 350 million. For the development of the land, a 25-year tax holiday has already been granted.

The extent of the Port City is around 440 Ha of reclaimed land of which the marketable extent is 269 Ha.

The entire project implementation is expected to take eight years with the first phase to take four years.