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| Sunday, 23 February 2003 |
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Tax holidays extended The three-year tax holiday for undertakings engaged in non-traditional exports, proposed in the Budget 2002, has been extended to five years. No minimum investment is required for exemptions available under the Inland Revenue Act (IRA). For Board of Investment (BoI) companies, investments of US$ 150,000 or Rs 15 million will qualify for this concession. Expansion of such undertakings with a minimum specified investment of between Rs 10 million and Rs 100 million made on or before April 1, 2004 under the Inland Revenue Act will qualify for a further 2-year exemption. Regarding BoI companies, investments exceeding Rs 100 million on expansion projects will qualify for this concession. Expansion of manufacturing undertakings other than non-traditional export undertakings, with a minimum investment of Rs 10 million, will also be exempted for two years if they complete expansion on or before April 1, 2004 on incremental profits. These facilities are available only under the IRA. Agriculture, fisheries, agro-processing, industrial tool and machinery manufacturing will also qualify for a five-year exemption. In the case of exemptions under the IRA, no minimum investment is requirement. BoI companies with investments of US$ 10,000 or one million rupees will qualify for this concession. The tax exemption period introduced by the Budget 2002 for large scale infrastructure projects has been extended to 12 years from 10 years and the minimum investment requirement has been reduced from Rs 1,250 million to Rs 1,000 million. Five-year tax holidays have been introduced for small-scale infrastructure projects in power generation, tourism and recreation, warehousing and cold storage, garbage collection and disposal, construction of houses and hospitals with a minimum investment of Rs 10-50 million under the IRA. BoI companies with an investment of US$ 500,000 or Rs 50 million will qualify for the tax concession. The rehabilitation of under-performing or non-performing industries, under a proposal approved by the Minister of Finance, will be exempted for three years on the profits and income of the entire undertaking. The proposal should include provisions for the settlement of statutory liabilities. The minimum investment under the BoI will be US$ 10,000 or one million rupees. A tax holiday of five years will be granted for new companies engaged in 'Research and Development' in relation to industrial activities with an investment of two million rupees within one year of commencement of operation. BoI companies with a minimum investment of US$ 50,000 or five million rupees will enjoy this facility. All exemptions are available either under BoI regulations or the IRA and different minimum investment limits will be applicable for BoI and IRA exemptions. |
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