• BOI and Investment Promotion Min. working on incentive package for 2025 Budget
• Tax credits and holidays under consideration to attract high-value investors
• New Economic Transformation Act to transition BOI functions into two separate entities
• Multilateral agencies may influence final form of investment incentives

The Government is considering granting either tax credits or tax holidays to potential investors as part of the package of incentives and concessions to spur investments in Sri Lanka which is proposed to be included in the 2025 Budget, according to the Board of Investment (BOI). 

Speaking to The Sunday Morning Business, BOI Director General Renuka M. Weerakone revealed that the BOI, together with the Ministry of Investment Promotion, had appointed a committee to formulate a proposal for a package of incentives and concessions to be offered to any investor who met certain specific investment thresholds. 

This proposal is set to be included in the 2025 Budget. 

She further revealed that this process would continue under the Economic Commission of Sri Lanka once the BOI ceased to exist following the enactment of the Economic Transformation Act.

“The proposal for investment incentives is still on the cards – it is being done and reviewed. That process is currently ongoing. We are hoping to have some incentives granted under the new commission,” she stated.

Weerakone further noted that the granting of either tax credits or tax holidays was being considered under this proposal.

However, she conceded that the multilateral agencies Sri Lanka was currently dealing with were unlikely to be in favour of granting tax holidays and therefore, the incentives granted under the proposal would most likely take the form of either a tax credit or other similar incentives geared towards granting any potential investor a benefit upon commencement.

The Speaker of Parliament endorsed the certificate on the Economic Transformation Bill on 9 August, which repealed the Board of Investment of Sri Lanka Law No.4 of 1978 and envisaged the splitting up of the BOI into two entities known as the Economic Commission of Sri Lanka and Investment Zones Sri Lanka.

Responding to a question regarding the future of the BOI following the Speaker’s endorsement, Weerakone shared that at the committee stage, a three-month transition period had been introduced by way of an amendment to the bill.

Accordingly, she revealed that as a result of this amendment, the BOI had a three-month period from the time the Economic Transformation Act came into operation to get things organised and to facilitate the bifurcation of the functions of the BOI into the two entities known as the Economic Commission of Sri Lanka and Investment Zones Sri Lanka.