Corporate tax holiday for new IPOs extended

22 November 2013 03:39 am Views - 4850

In a bid to attract more companies to the Colombo Stock Exchange (CSE), the Budget 2014 extended the 3-year 50 percent tax holiday from 2014 onwards for new listings.

This is not a brand new proposal as it was originally introduced from last year’s budget. Whether authorities were able to realize the desired results were doubtful because the Colombo bourse has seen only one Initial Public Offering (IPO) by Anilana Hotels & Properties Limited so far.

Further, Amana Bank Limited this week announced their Rs.2.0 billion IPO which perhaps could be the final for this year.

According to last year’s original budget proposal, any company that lists and maintains at least 20 percent of its stake with the public would only have to pay half the corporate income tax which is currently at 28 percent for the next three years.

However, most importantly the government did not make any changes to tax concessions given to corporate debt instruments despite the hype for a likely withdrawal of the concessions.