Kabir wants Sri Lanka to follow Indian tax system

COPF to green light tax concessions for India’s HCL Technologies subject to Finance Ministry justification

By Yohan Perera and Ajith Siriwardana 

Sri Lanka should follow the Indian tax system when it comes to granting tax concessions to foreign investors, main opposition Samagi Jana Balawegaya (SJB) proposed yesterday. 

Speaking during the debate in parliament on granting a 17-year tax holiday to India’s HCL Technologies Ltd, SJB MP Kabir Hashim said Sri Lanka should follow the Indian system rather than giving long tax holidays to any company. 

“India gives tax concessions to foreign companies only if they locate their businesses in special economic zones. Only five-year tax holidays are given in India. Accordingly, the Indian government charges a 50 percent tax on profits after the five-year tax holiday lapses. Sri Lanka also should follow this system,” he said.

“We accept that HCL Technologies is one of the largest IT companies in India and that it will invest US$ 10 million and pays monthly salaries of Rs. 500,000 for some of its employees and will increase (salaries) it to Rs. 1 million in the future. We also understand the fact that the company will provide employment to 5, 380 Sri Lankans by 2032,” he added. 

Meanwhile, it was reported that the Committee on Public Finance (COPF) had agreed to give the  green light for the granting of tax concessions to HCL Technologies Ltd. provided the Finance Ministry justifies the decision to grant a long tax holiday under the Strategic Development Act.