📈 CA Sri Lanka Urges Urgent Tax & Policy Reforms to Boost FDIs

The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) has issued a policy white paper calling for immediate tax and investment policy reforms. The report highlights that traditional tax holidays are losing traction under the OECD’s Global Minimum Tax (GMT) framework, risking the loss of national tax revenues to foreign jurisdictions. • Overall Strategy: Modernize Sri Lanka's investment framework by replacing outdated tax holidays with OECD-compliant incentives like Qualified Refundable Tax Credits (QRTCs) and a Qualified Domestic Minimum Top-Up Tax (QDMTT) to retain revenue locally. • High-Impact Sectors: Shift toward spend-based incentives targeting technology & digital services, renewable energy, export-oriented manufacturing, and green economy initiatives. • Ease of Doing Business: Streamline complex visa and work permit approval processes for foreign investors to minimize administrative delays and improve investment predictability. • Tax Administration: Enhance administrative efficiency by adopting risk-based audit frameworks, expanding digital tax systems, and establishing an Independent Tax Ombudsman to resolve taxpayer grievances. • Legal & Regulatory Gaps: Resolve Beneficial Ownership Register inconsistencies—particularly within the Colombo Port City framework—to align with global transparency standards and modernize Advance Pricing Agreements (APAs) for multinational enterprises.