New entrepreneurs are being encouraged in doing business by offering unprecedented tax breaks and other concessions and introducing financial sector reforms, Finance Ministry sources divulged.
As an initial step 50 percent tax concession will be offered for the years 2021/2022 for such companies that are listed before 31 December 2021 and to maintain a corporate tax rate of 14 percent for the subsequent three years, a top Treasury official said.
He noted that 50 percent concession for the first year and 14 percent tax rate for the next three years will be granted for the manufacturing sector.
This was aimed at the listing of local companies in the Colombo Stock Exchange; he said adding that there are 285 companies listed on the CSE at present.
The most significant relief for entrepreneurs was the tax holidays granted for the gains and profits (excluding capital gains) received or derived from several new businesses, he disclosed.
A 10-year tax exemption period will be given for an undertaking selling construction materials recycled in a selected separate site established in Sri Lanka to recycle the materials which were already used in the construction industry.
Five-year tax exemption period is to be offered for any business commenced on or after April 1, 2021 by an individual after successful completion of vocational education from any institution. Such institutions should be standardised under Technical and Vocational Education and Training TVET concept and regulated by the Tertiary and Vocational Education Commission.
Manufacturing of boats or ships in Sri Lanka and received or derived any gains and profits from the supply such boats or ships and any “renewable energy project” established with a capacity to produce not less than 100 Megawatts solar or wind power and supplied such power to the national grid are eligible for a 7-year tax holiday .
Five-year tax exemption period will be given for any undertaking commenced on or after January 1, 2021 by any person who constructs and installs the communication towers and related appliances using local labour and raw materials in Sri Lanka or provide required technical services for such construction or installation.