Exports to China will be exempt from tax -Minister Lakshman Yapa Abeywardena

By Naalir Jamaldeen

Budget 2015 envisages more Foreign Direct Investments into the country. Japanese investors are keen to invest on medium and small scale industries in Sri Lanka. The Budget has covered all sectors, Investment Promotion Minister Lakshman Yapa Abeywardena said in an interview with the Sunday Observer.

He said that a free trade agreement will be signed with China soon. When the agreement comes into effect export items to China will receive 100 percent tax relief.

"As the Minister responsible for investment promotion I have taken all steps to bring in more foreign investments to the country. Four special Departments such as the Investment Promotion Department, Application Evaluating Department, Project Implementing Department, and Monitoring Department are now functional in the Board of Investment (BOI) to facilitate local and foreign investments. These Departments will have direct deal with investors" the Minister said.

These Departments will play a pivotal role in attracting and providing facilities to foreign investments. The new arrangement will increase the efficiency and productivity of BOI by several folds. We also formulated a mechanism to prevent the inconvenience caused to local and foreign investors in the investment process", Minister Abeywardena said.

"We plan to set up Free Trade Zones at suitable locations across the country. These zones will be set up jointly with the developed countries. Moves are underway enter into an free trade agreement with China. Sri Lanka will receive a tax free market for its goods which are exported to China. So this facility will be so important to attract more foreign investors towards the country. There is a close link between FDI and market opportunities. Vietnam's and Sri Lanka's export volume was same in 1990. Vietnam has signed FDI agreements with a large number of countries across the world within the period from 1990 to so far. It has signed agreements with Asian countries, USA, China, Japan, South Korea, New Zealand, Australia, India etc...", the Minister said. Apparel exports have increased by a considerable level. We provide facilities to improve the apparel industry while providing enough incentives to investors.

"We have an IT based process. All activities of the BOI has been modernised as in developed countries. Anytime investors can get information of investment opportunities available in Sri Lanka. An on line tracking system will also be introduced by the BOI for the convenience of investors. Through this service investors can easily learn in which process his application is in. The investors can check the progress of his application from submitting to final approval", the Minister said.

"We plan to give a link even to investors over the tracking system. We hope to build a mutual relationship with investors. Steps will also be taken to develop the connection with line Agencies", he said.

"There should be a plan, if a large amount of money is invested on infrastructure development. We plan to introduce various programs for the sake of investors. There should be a plan that how long it will take to get income from the investment. Then only the real outcome from the investment can be obtained. As BOI, we are capable of facing whatever the situation arise in the industrial sector. If the infrastructure facilities were developed in villages the local and foreign investor will make more investments in villages providing ample benefits to village community", Minister Abeywardena said.

"We plan to conduct skills development programs for labourers. The labour force should be trained to work in the industrial sector", the Minister said.

He said that the Government plans to take the industrial sector to the villages. Through this mechanism it hopes to address unemployment problems in the villages while utilising the resources which are available in the villages. Electricity has been supplied to many villages.

The Minister said the Government has provided more incentives to foreign investors in the Budget

A pension scheme will also be introduced for garment sector employees.

The tourism industry has developed fast in the past few years. Tourist arrivals have increased by leaps and bounds, he said.

Minister Abeywardena said that during the recent visit to the North he held discussions with the business community in Jaffna about the prevailing peace to invest in the North and the Government's interest to bring more investments to the North.

Various problems of investors in the Northern peninsula were discussed and solutions to some were found The expatriate business community from the North also attended the meeting with the Minister. The expatriate business community was willing to return to invest.

"A large number of foreign and local investors have expressed the desire to invest in the North. Renowned investors too have expressed a similar desire. We conducted surveys in the past on how to bring development to the North as in the other regions of this country", Minister Abeywardena said.

"The Government has developed infrastructure facilities in the North after the elimination of terrorism. Steps have been taken to provide electricity to new areas to attract investors", Minister Abeywardena said.

" A conducive environment for new investments has been created in the North. A regional office of the Board of Investment is now functioning in Jaffna", the Minister said.

The Minister said that investors expressed their gratitude to the Government for providing infrastructure facilities to improve the industrial sector in the North.

He said that no new investments were made in the North between 1979 to 1994. During President Mahinda Rajapaksa's tenure from 2005 to 2013, Rupees 66,712 million has been allocated to the North for industrial sector development. After the liberation of the North from the clutches of the LTTE, the President paid close attention to achieve sustainable development in the North. The BOI also played a pivotal role in this regard.

The support from the political authorities in the province and the relevant institutions are vital to bring more investment to the North, the Minister said. "When there is political stability, a country can achieve sustainable development. Political stability and economic growth are interconnected. When there is political stability local and foreign investors will make investments without hesitation", the Minister said.

Restoration of peace and development of infrastructure has made Sri Lanka into a favourable destination for foreign investment, he said.

"Sri Lanka needs investments that will safeguard our environment, adheres to laws of the land and also help in sustainable economic development. As the Investment Promotion Ministry, we are willing and ready to deal with investors who wish to take advantage of various investment opportunities and prospects in our country.

The industrial sector is to be expanded to the villages. At least five projects will be implemented in each district. With this mechanism, there will be a way to make use of resources available in the villages while providing employment to rural youth, Abeywardena said. "All infrastructure facilities including factory buildings will be given to investors willing to invest in villages", he said.

"Employment generation for youth is also one of the areas which the BOI is paying attention. We have the responsibility to address the unemployment problem among youth", the Minister said. If industries which are located in unsuitable locations in the cities were taken to villages, due to this move the congestion in cities can be prevented while providing jobs to rural youth", the Minister said.

"Investors who have invested in Sri Lanka are aware of the peace prevailing in the country. They are keen to make their second investment in Sri Lanka. We hope to take such investments to the village. We also plan to re-start nonfunctional factories", he said. Sri Lanka will be developed as a destination famous for tourism and related activities such as hotel, duty free shops, the Minister said.