Sunday Dec 22, 2024
Sunday Dec 22, 2024
Monday, 22 February 2021 01:10 - - {{hitsCtrl.values.hits}}
By Chandani Kirinde
The Government has announced numerous tax exemptions for the dedicated Pharmaceutical Manufacturing Zone being built on 400 acres of land in Hambantota.
The tax exemptions have been granted under the provisions of the Strategic Development Projects Act.
The dedicated Pharmaceutical Manufacturing Zone will be built in an area of 400 acres of land owned by the Board of Investment (BOI) in Hambantota-Arabokka area in two stages of 200 acres each to facilitate investments made by foreign/local pharmaceutical manufacturers.
It has been identified as a project of national interest that is likely to bring economic and social benefits, and one which will also change the landscape of the country.
The BOI will be the implementing agency under the supervision of the Ministry of Health and the State Ministry of Production, Supply and Regulation of Pharmaceuticals.
The tax concessions will apply to Corporate Income Tax, Income Tax on employees, Value Added Tax (VAT) and the Ports and Airports Development Levy, while the concerned enterprises will also be exempted from Customs Duty for import of capital and construction-related items, raw materials and production/process-related consumables other than those on the negative list issued by the Finance Ministry.
There will also be exemption from charges of CESS under the Sri Lanka Export Development Act for importation of capital and construction-related items, raw materials, and production/process-related consumables for both production for export and import substitution.
The infrastructure requirement of the first phase of the zone will be ready within 18 months and the tax exemptions will apply to individual enterprises established within the zone, and will be customised for each said enterprise according to a pre-defined criterion developed based on parameters such as size of investment, type of the product to be manufactured, market orientation, type of patent rights, domestic value addition and manufacturing quality etc.
Individual enterprises will be eligible for selected incentives based on the above criteria.
The incentives will be reviewed every five years with effect from the date of approval of Parliament for the zone and submitted to the Cabinet for its approval, followed by a fresh gazette notification granting incentives for each enterprise which will be decided by a committee comprising the Chairman and Director General of BOI , Secretary/nominee of Ministry of Health, Secretary/nominee of State Ministry of Production, Supply and Regulation of Pharmaceuticals, Chairman of State Pharmaceutical Corporation, Chairman of State Pharmaceutical Manufacturing Corporation, Chairman of National Medicines Regulatory Authority, Chairman of Export Development Board and Chairman of Central Environmental Authority, which will be stipulated in the individual agreement between the BOI and each enterprise.
The tax exemptions have been notified by Prime Minister Mahinda Rajapaksa in his capacity as Finance Minister by gazette notification.
