The Hon. Nimal Palihena

¶ 01 Hon. Deputy Chairperson of Committees, we debate Amendments to Act No. 11 of 2021. Despite many attempts in our history, we often fell short of development targets. The Port City’s core purpose is to attract FDI. Although US$ 1.4 billion was invested to build the land, expected outcomes have not yet materialized; thus, reform is needed.

¶ 02 While prior provisions allowed up to 25-year tax holidays, today’s revenue needs require balance. The Amendment grants a three-year transition for already-registered companies’ employee PIT, while new employees will pay under standard rules—ensuring fairness between those working in the zone and citizens elsewhere who already pay tax.

¶ 03 Another positive change: earlier, applicants had to pay multiple charges at application; now only the application fee is due initially, with other charges payable upon approval—reducing entry barriers. Sectors envisaged include IT, finance, professional services and tourism. Transactions in the zone are in approved foreign currencies, generating dollar inflows.

¶ 04 Concerns about jurisdiction are addressed: offshore banking and related entities will be under Central Bank regulation, including the power to act where entities fail to comply.

¶ 05 The land reclamation was carried out by China Harbour Engineering Company, with 75 per cent of land-use rights to the developer and 25 per cent to the Government under agreements. Over a hundred prospective projects are in process. Despite criticisms, economic management has improved, growth reached about 5 per cent in 2025, corruption space has been curtailed, and ratings have improved to CCC+. We are confident 2026 will see stronger Port City investment inflows.

¶ 06 Thank you.