BOI reverts to old regulations

Chairman points out investors value stability over tax holidays

By Senuri de Silva

The Board of Investment will revert back to previous regulations, according to several of its top officials, who addressed a gathering of professionals at a meeting held at the World Trade Center yesterday.

Speaking of the progression of the BOI since the expiry of tax incentives granted by the November 2014 budget, BOI Chairman, Upul Jayasuriya pointed out that for the time being the BOI had reverted back to the regulations under Gazette No. 1469/35 of November 2006. 

He made it clear that the 2006 regulations would be followed up until new regulations were put in place following the 17 August election saying: “For the moment we are proceeding with the 2006 regulations until such time as a fresh look is taken and things are made more attractive to investors.”

Some professionals raised some concerns over reactivating old regulations though the suspension of tax incentives by the previous regime. 

Speaking on what should be done in this regard to encourage foreign investment in Sri Lanka, Jayasuriya pointed out that rather than tax holidays investors sought reassurance from the Government that their investment was protected.  

 “What they want most is a stable government and stability in their investments. It’s investment protection that’s expected of a regime,” he said.

Additionally, he said the separate land law regime that has been applicable to foreign investors trying to set up factories in the country has been counterproductive to the message that foreign investment was welcome in Sri Lanka.

“No country is offering different terms to the local people as against the investors,” he expressed, adding, “No investor would like to be treated in a different way.”

There is also a plan to make more accessible employment opportunities to locals through the creation of 45 zones in areas with a high availability of labour. “Instead of the 12 zones that we are proposing there should be 45 zones,” Jayasuriya explained.

A further issue of companies locking land that is allocated in order to carry out the development proposed will also be addressed.

“The lands that we offer are not for such purposes,” he said. Delays would be limited but he was quick to add that this would not mean that inevitable delays would not to be accommodated. However, steps will be taken to ensure that companies stick to the development frameworks in agreements made and in turn the BOI will also take steps to speed up the process of responding to proposals submitted by the investors.

Constant communication between the BOI and advisors will also be maintained in the future to ensure that proper information is always available to investors.