Sri Lanka China Sea Reclamation ‘City’ Given Tax Breaks!
A 1.3 billion US dollar sea reclamation project by the main port in Sri Lanka’s capital Colombo by a Chinese firm has been given sweeping tax breaks, a government notice said.
CHEC Port City Colombo (Private) Limited, will reclaim 233 hectares of sea near the Colombo port, with a wave projection breakwater, revetments, canals, artery roads and utilities spending 1.3 billion US dollars, a notice in the state gazette said.
The notice is the first phase of giving sweeping tax breaks to identified ‘strategic’ projects, which has to be ratified by the cabinet of ministers and presented to parliament.
Though the notice did not elaborate, Colombo Port officials have said earlier that the project will be awarded to China Communications Construction Company, the parent of China Harbhour Engineering Company (CHEC).
The Chinese firm will build the city and will give a part of the land to Sri Lanka’s ports agency. The project which is to be spread over 8 years will be given a 25-year tax holiday on profits and dividends paid to shareholders will be exempt for 25 years.
No withholding tax will be charge in interest on foreign loans, technical fees to consultants, management and royalty fees below 3 percent of gross revenues, marketing fees below 1.5 percent of revenue and incentive on management fees below 10 percent of gross profits.
Up to 30 expatriate staff will also be exempted from income tax for a period of 10 years.