The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 Thank you, Hon. Presiding Member. Summing up for the Government:

¶ 02 After assuming office, we had a mandate to transform the country. First, we stabilized the economy—recognized nationally and internationally, reflected in improved debt ratings. The next phase is building a prosperous economy, for which large-scale, diversified, production-oriented investments are essential. The Port City is a specialized vehicle to attract such investment.

¶ 03 The 2021 Act sought to attract investment, but we identified serious issues: investor confidence and fairness were not adequately assured, and too many provisions were discretionary. We now move from discretion to rules-based incentives.

¶ 04 Key changes:

¶ 05 - Corporate income tax holidays: previously up to 25+ years without robust criteria; now linked to investment size and employment generation, for defined classes A–D (USD 1 billion, USD 500 million, USD 100 million, USD 25 million). Maximum holidays capped at 15 years; secondary (non-primary strategic) businesses get reduced rates (e.g., 7.5% for an initial period) under a fair, general regime.

¶ 06 - Personal income tax: Previously, Port City employees could have complete exemptions. To restore fairness, we end future blanket exemptions. Existing authorized persons receive a three-year transition. This affects employees, not companies. Non-residents are taxed only on Sri Lanka-sourced income.

¶ 07 - Compliance: During concession periods, entities must file with the Inland Revenue Department; the Amendment strengthens audit, monitoring, and supervisory powers.

¶ 08 - Offshore banking: We have ensured robust oversight—tying in the Foreign Exchange Act and empowering the Central Bank under Section 42 with six specific oversight powers to regulate, supervise, and act where needed. There is no carte blanche; further Amendments can be introduced if necessary. At present, 149 authorized persons are on-board, including four primary strategic businesses, three duty-free entities, and 24 secondary strategic entities—now operating under a common, transparent framework.

¶ 09 Finally, regarding public finance narratives: all statutory reports under the State Finance Management Act, No. 44 of 2024, have been duly submitted within time; contrary allegations are incorrect.

¶ 10 These Amendments align incentives with economic outcomes, tighten transparency and oversight, and preserve macro-financial stability while remaining investor-friendly. We seek to attract investment on a credible, rules-based footing, ensuring long-term national benefit. Thank you.