The Parliamentary Committee on Public Finance (COPF) has approved the Colombo Port City Economic Commission (Amendment) Bill, post consideration.
According to a Parliament statement, in consideration of the Colombo Port City Economic Commission (Amendment) Bill, it was stated that the amendment limits income tax exemptions for employees of new entrant authorized persons.
However, officials present stated that a 3-year transitional period for existing entities has been given.
This was discussed at length during a meeting of the Committee on Public Finance, chaired by MP Harsha de Silva, in Parliament yesterday (06 Jan).
At the meeting, COPF members sought clarity on the rationale for amending tax incentives, particularly the decision to limit income tax exemptions for employees of authorized persons to a transitional period for existing entities, while discontinuing such exemptions for new entrants.
The Committee also examined proposed changes to application fees and charges, to reduce upfront costs on the part of investors by deferring certain payments until licensing, while seeking assurance that the revised structure would remain competitive and transparent.
The COPF Committee also queried the alignment of foreign exchange provisions with the Foreign Exchange Act No. 12 of 2017, seeking clarification on the treatment of rupee earnings, currency conversion, and safeguards to ensure consistency with national monetary and financial regulations.
The offshore banking framework attracted significant attention, with the Committee members requesting updates on the status of banking licence applications, differences between Port City offshore banking operations and domestic banking activities, and the adequacy of regulatory oversight. The Central Bank’s enhanced supervisory role, including capital, liquidity, governance, and compliance requirements, was discussed in the context of international best practices.
Concerns were also raised regarding enforcement and penalties for non-compliance, with Members of Parliament emphasizing the need for deterrent-level sanctions, effective monitoring, and strong reputational safeguards to maintain the integrity of the Port City.
Officials noted that the amendments are intended to operationalize the Port City framework, enable approvals of new business activities, and balance investor attractiveness with fiscal discipline, transparency, and international commitments.
Following in-depth deliberations, the COPF Committee approved the Colombo Port City Economic Commission (Amendment) Bill. (Newswire)