Bouquet of tax exemptions for Sampur Project

Wednesday, 9 May 2012 00:08 - - {{hitsCtrl.values.hits}}

The Government has decided to give very attractive tax exemptions for the Sampur Coal Power Plant Project, which will be debated in Parliament today.

The documents detailing the tax exemptions were presented to Parliament yesterday by the Economic Development Ministry under the Strategic Development Projects Act, which will be based on a Build-Own-Operate basis.

Key among the points are a 25-year Corporate Income Tax holiday under the Inland Revenue Act that will come into effect from the year that the company makes a profit or two years after the commencement of commercial operations, whichever comes first.

The Sampur Project is a joint initiative by the Ceylon Electricity Board and National Thermal Power Company of India.

The company will also be exempted from payment of Withholding Tax, interest paid on foreign loans obtained for capital expenditure and on technical fees paid by the consultants employed by the project.

The documents went on to say that Value Added Tax has also been exempted for all elements of the project for five years including goods bought locally or payments made to contractors and sub-contractors.

Import of coal and all raw materials will be exempt from tax for 25 years from the commencement of commercial operations at the plant. Port and Airport Development Levy as well as Nation Building Tax will not be levied from the project while Customs duties will also be waived for 25 years.