Annual Report 2010 - Ministry of Finance and Planning

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Ministry of Finance and Planning Sri Lanka > Annual Report 2010Strategic Development Projects Act No. 14 of 2008,as amended by Act No. 12 Of 2011 (April 2011)Projects coming under the purview ofthe Board of Investment of Sri Lanka,bringing in strategically importantforeign investment into the country areprovided with facilities as envisagedin the Strategic Development ProjectAct. A project, which in the nationalinterest, is likely to bring economicand social benefits to the countryand which is also likely to change thelandscape of the country, primarilythrough;• strategic importance attached tothe proposed provision of goodsand services, which will be ofbenefit to the public.• substantial inflow of foreignexchange to the country.• substantial employment, whichwill generate and enhanceincome earning opportunities.• the envisaged transformationin terms of technology, couldbe recommended to be declaredas a Strategic DevelopmentProject(SDP) 4 .A SDP may be granted exemptions,either in full or part, from time to time,from the applicability of the provisionsof one or more of the followingenactments 5 ;• Inland Revenue Act No. 10 of2006.• Value Added Tax Act No. 14 of2002.• Finance Act No. 11 of 2002.• Finance Act No. 5 of 2005.• Excise (Special Provision) Act No.13 of 1989.• Economic Service Charge Act No.13 of 2006.• Debits Tax Act No. 16 of 2002.• Customs Ordinance (Chapter 235).• Nation Building Tax Act No. 09 of2009.• Ports and Airports DevelopmentLevy Act No. 18 of 2011.Further, SDPs may be given suchother assistance or facilitationas may be necessary, but any taxexemption is subject to a maximum of25 years.The Process Required To BeFollowed 6 ;• The Board of Investment (BOI)and the relevant line Ministry,identifies SDPs,• The Minister of Investment topublish a notice in the Gazette tobring information relating to theSDP to the public domain;• Upon the expiry of 30 daysfrom such Gazette notification,the Minister of Investment - inconsultation with the Ministerof Finance, informs the Cabinetof Ministers the rationale forconsidering such project as aSDP, the period of exemptionproposed to be granted, andobtain Cabinet approval toidentify such project as a SDPand the exemptions proposed tobe granted;• If approved by the Cabinetof Ministers, the Minister ofInvestment must within 6weeks hence, publish for thesecond time an Order in theGazette to bring more specificinformation of the SDP to thepublic domain, i.e the name ofthe SDP, the proposed date ofcommencement of such a project,the commencement and enddates of proposed exemptions.• Every such Order published in theGazette should be placed beforethe Parliament within 3 monthsfrom the date of publication.Such an Order will become operativeimmediately upon approval byResolution of Parliament. If notapproved by Parliament, the order istreated as rescinded with immediateeffect without prejudice to anythingpreviously done 7 .In the event a SDP requiresland for such investment, landwill be dispossessed as per theGovernment’s land alienation policy,subject to applicable laws andregulations.4 Section 6, Strategic Development Act No 14 of 2008 as amended by Act No 12 of 20115 Schedule, Strategic Development Act No 14 of 2008 as amended by Act No 12 of 20116 Section 3, Strategic Development Act No 14 of 2008 as amended by Act No 12 of 20117 Section 4, Strategic Development Act No 14 of 2008 as amended by Act No 12 of 2011183
3 | REFORM INITIATIVESTable 3.1 > A Regional Comparison of Standard Tax Rates – At a GlanceCountries Indirect Tax Rates % Corporate Income Tax Rate % Personal Tax Rate %VAT / GST[Maximum Rate]Year 2011 Year 2010 Year 2009China 17 25 45Pakistan 17 35 20New Zealand 15 30 39India 12.5 30 30Philippines 12 30 32Australia 10 30 45Indonesia 10 25 35Korea (South) 10 22 35Malaysia 5 to 10 25 28Vietnam 10 25 40Singapore 7 17 20Thailand 7 30 37Japan 5 30 40Taiwan 5 20 40Sri Lanka (2011) 12 28 24Source;Indirect TaxesCorporate Income TaxPersonal TaxThe 2011 worldwide VAT, GST and Sales Tax Guide issued by Ernst & YoungThe 2010 worldwide Corporate Tax Guide issued by Ernst & YoungSingapore Budget 2009 synopsis, except Pakistan and New Zealand184
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Heads ofDepartments under thePurvie
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ContentsChapter 1 Development Persp
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Chapter 5 Foreign Financing 243Over
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Ministry of Finance and Planning Sr
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SRI LANKA AT A GLANCE - 2005 & 2010
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BRIEFINGSBriefings“Much remains t
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1 | DEVELOPMENT PERSPECTIVESEconomi
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1 | DEVELOPMENT PERSPECTIVESThe Ser
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1 | DEVELOPMENT PERSPECTIVESBox 1.1
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1 | DEVELOPMENT PERSPECTIVESDecline
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1 | DEVELOPMENT PERSPECTIVESIndustr
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1 | DEVELOPMENT PERSPECTIVESWelfare
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1 | DEVELOPMENT PERSPECTIVESEnding
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6 | DEVELOPMENT FINANCEOverviewThe
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6 | DEVELOPMENT FINANCEduring the y
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6 | DEVELOPMENT FINANCEMicrofinance
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7 | FINANCIAL STATEMENTSFinancial S
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Financial StatementsHead-wise Summa
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Financial StatementsHead-wise Summa
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Financial statementsHead-wise Summa
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Annual Report 2010 - Ministry of Finance and Planning

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