Colombo: Amid the controversy surrounding the China-backed Port City in Colombo, Sri Lanka Minister of Justice Ali Sabry has said the government owns 100 percent of the land and the project has been initiated to bring investment in the special financial zone.
Addressing a media briefing on Sunday (April 18), Minister Sabry said the total area of the investment zone is 269 hectares and 91 hectares for public facilities and cannot be given to the project company, The Colombo Page reported.
Out of the remaining land of the financial zone, 116 hectares or 43 percent will be given to the project company which initiated the project in 2013 and spent USD 1.4 billion to develop the Port City.
“But all 100 percent of the land is owned by the government. It is completely false to say that land was given to someone else,” Sabry said.
This comes as the opposition has alleged that a bill to set up a Commission to govern a Colombo Port City has given it too much discretion, denied equal opportunity to Sri Lankans who did not have black money stashed abroad.
Without naming China, US Ambassador to Sri Lanka, Alaina Teplitz, earlier this month, had warned the country of unintended consequences of `nefarious actors` who may try to misuse a Colombo Port City`s easy business rules as a permissive money laundering haven amid concerns of tax leaks.
Sri Lanka has unveiled draft legislation for a Colombo Port City Commission which allows for sweeping tax breaks, tax-free salaries, and to be an offshore financial centre, reported economy next.
“Any legislation relating to the port city has to be considered very carefully for its economic impact,” Teplitz told reporters in Colombo in an online discussion.
“And of course among those un-intended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would actually be illegal.”
The agency running the Port City would have extensive powers to exempt businesses from taxes of up to 40 years, though it is not a tax haven in the traditional sense, reported economy next.
Sri Lanka`s tax revenues have plunged in 2020, raising concerns over debt and the fiscal path, credit downgrades, and the ability of the government to provide vital public services to the people, while managing loss-making state enterprises.