The newly appointed Investment Promotions Minister Lakshman Yapa Abeywardena announced a series of tax concessions for Sri Lanka Gateway Industries (Pvt) Ltd, which will undertake a US$ 4,000 million (around Rs.505 billion) project in Sampur, Trincomalee. The project will include the development, operation and management of a special zone for heavy industries including the construction of a deep water jetty and stockpile yard.

Imports of project-related capital and construction goods required by the Company or the contractors and sub -contractors would be exempted from customs duty, as approved by the Board of Investment (BOI) for the implementation period of seven years, effective from the date of the project agreement.

The Company will be exempted from income tax for 25 years, starting from either the first year in which the company makes taxable profit or, from two years after commencement of commercial operations, whichever is first.

Other exemptions will come in the form of Withholding Tax on interest paid on foreign loans obtained for capital expenditure, and on technical fees paid to consultants employed in the project, while a maximum of 20 of the expatriate staff of the Project Company shall be exempted from the charge and payment of Pay As You Earn (PAYE) Tax.

There will also be Value Added Tax (VAT) exemption on importation of project related goods, and local purchases of project related goods and services including payments to contractors and sub-contractors, as approved by the Company during the Project Implementation / Construction period.

Exemptions will be also granted from Ports and Airports Development Levy and the Nation Building Tax.

The project has been identified as a Strategic Development Project. The necessary physical and social infrastructure including educational and health facilities, modern settlement with leisure and recreation facilities, and other facilities such as internal roads, provision of power requirements, water supply, sewerage and water treatment conducive to attract and facilitate investment by the prospective investors also will be undertaken within the Zone.

Sri Lanka Gateway Industries (Pvt) Ltd and the BOI of Sri Lanka signed the agreement for the project in June 2012.