The Overseas Realty (Ceylon) PLC is making representations to the Ministry of Finance for a process of what it calls ‘fairplay’ in applying Value Added Tax (VAT) to property development projects, officials said.
"This tax is applicable at 12% to 'large' projects that are worth more than US $10 million.
But we say that large projects (by their developers) can be targeted at lower middle income segments as well - it's just that the projects are larger. We're presenting a paper on this to the Finance Ministry before the budget with another property sector developer," W.D. Barnabas, CEO ORL told the Business Times on the sidelines of a media conference to launch the company’s rights issue.
He said that the paper will discuss this anomaly and make some suggestions on how it can be addressed. He said the firms want it done away with altogether or to apply it across the board to all projects.
He said that the rights issue will issue 281 million shares, bringing the value of the total issued shares to Rs.562 million. Each share is valued at Rs.15 and a part of the money will be used to fund working capital needs of the second phase of the Havelock City Project which will be ready for selling by the end of this year.