Port City Economic Commission issues clarification over remarks made by Dr. Sharmini Coorey

The Port City Economic Commission yesterday issued a clarification over remarks made by Presidential Advisor and former IMF Director Dr. Sharmini Coorey, at the 73rd Anniversary of the Central Bank of Sri Lanka recently.

In her speech Dr. Coorey (https://www.ft.lk/opinion/The-Way-Forward-Price-stability-and-prosperity-need-good-governance-Part-1/14-754861 and https://www.ft.lk/opinion/CBSL-73rd-Anniversary-Oration-The-Way-Forward-Price-stability-and-prosperity-need-good-governance-Part-2/14-754919 ) raised concerns raised about the up to 40-year tax incentives provided under the Colombo Port City Economic Commission Act, No. 11 of 2021, without the approval of Parliament. The Colombo Port City Economic Commission issued the following clarification.

To clarify and correct this matter, Section 53 (1) of the Colombo Port City Economic Commission Act No. 11 of 2021 states that when a business is identified as a Business of Strategic Importance (BSI), the Commission recommends the designation of such a business, as a Business of Strategic Importance and the granting of exemptions or incentives to the President or the relevant Minister. Subsection (2) goes on to explain that the President or the Minister, after considering these recommendations and in consultation with the Finance Minister, may take the necessary steps to inform the Cabinet of Ministers regarding the designation of businesses as Businesses of Strategic Importance, along with the proposed exemptions and incentives. It’s important to note that the approval of the Cabinet of Ministers is required for the designation of businesses as ‘Businesses of Strategic Importance’ and for granting exemptions or incentives.

Furthermore, the role of Parliament in Colombo Port City regulations is underscored by Section 71 of the Act, which mandates that any regulation made concerning matters pertaining to Colombo Port City, must be approved by Parliament within 03 months of being published in the Gazette.

The Businesses of Strategic Importance (BSI) regulations, for granting exemptions and incentives, meticulously followed all stipulated approval procedures in close collaboration with key Government stakeholders, including the Ministry of Finance. These regulations received Cabinet approval on 22 May were published by Extraordinary Gazette on 4 August, received bipartisan support from the Committee on Public Finance (COPF) on 15 August, and were approved by Parliament on 23 August 23. The BSI regulations apply to authorised persons with a license to operate within Colombo Port City and are designated as Primary BSI or Secondary BSI. The regulations for Primary BSI and Secondary BSI offer exemptions or incentives for up to 35 years and 25 years respectively. To avail of the exemptions or incentives under the BSI regulations, the business must be licensed within 02 years of the Extraordinary Gazette dated 4 August.

The Colombo Port City Economic Commission serves as the single window investment facilitator, responsible for creating a business-enabling environment and building a world-class, sustainable Special Economic Zone in South Asia with a focus on the service sector.