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More tax incentives to spur investment

The Government has decided to grant additional tax incentives to several industries to promote foreign and local investment involving large-scale employment generation.

The incentives covering agriculture, fisheries, agro processing and machinery manufacture will be granted as extensions to existing concessions which were granted to industrialists by the 2002 budget, Cabinet Spokesman Minister Prof. G.L. Peiris announced yesterday.

Such undertakings will qualify for a complete five year tax exemption. The minimum investment limit is also to be reduced as a further relief to these sectors.

The three year tax holiday proposed for non-traditional exports in the 2002 budget will be extended to five years including a reduction in the minimum investment limit. If the proposed investment is made on or before April next year, a further exemption of two years will be granted.

The Government has also decided to provide a tax holiday of five years for new companies engaged in research and development on industrial activities to encourage more local scientific activities.

Tax exemption for large scale infrastructure projects have been extended to 12 years from the current 10 years coupled with a reduction in the minimum investment requirement, Prof. Peiris said.

A five year tax holiday has been introduced for small scale infrastructure projects in power generation, tourism and recreation, warehousing and cold storage, garbage collection and disposal and the construction of houses and hospitals with a low minimum investment requirement.

All these exemptions will be available either under the BOI regulations or the Inland Revenue Act. The different minimum investment limits will be applicable to BOI and the Inland Revenue exemptions.

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