Help the nation, get tax relief
Legislation giving tax exemptions to individuals and companies that contribute to the country’s economy, while imposing limitations on certain tax holidays, is expected to be approved by parliament this week.
The Inland Revenue (Amendment) Bill amending the Inland Revenue Act No 10 of 2006 was presented to Parliament earlier this month and will be taken up for debate on Thursday along with several other related bills.
Inland Revenue Deputy Commissioner H.B.A. Seneviratne said the bill would incorporate the 2008 budget proposals. These would include incentives for foreign earnings, investment in outstation areas, concessions for cooperative societies and projects related to the government’s Nagenahira Udanaya programme in the East and the exemptions of tax for contributions to the Api Wenuwen Api fund which has been set up for the benefit for the security forces personnel.
He said the limitations or removal of tax exemptions given to foreign experts in terms of Board of Investment Act had been introduced with the aim of encouraging the hiring of local experts. But in instances where sufficient expertise in some field was not available among Sri Lankan, the foreigners hired too would be exempted from income tax.
The official said the amendments would also seek to encourage the investment outside Colombo by extending the prevailing tax holiday until March 2009 and exempting profits and income taxes of the investment in the Eastern province if the investment exceeded Rs 50 million or provided more than 50 jobs.
He said cooperative societies would be exempted from income tax for five years. The amendments also include a limitation of tax exemptions previously given to certain categories of officers and employees of public service.
Mr. Seneviratne said that despite some difficulties for public servants, the new amendment should be implemented since this would encourage economic development and the inflow of foreign exchange.
Along with the amendments to the Inland Revenue Act, the Government will also pass legislation to promote strategic development projects, for which a tax free period will be provided. Strategic development projects will be identified on the basis of national interest and which are likely to bring economic and social benefits to the country.