## 📉 Institutional Oversight Threatens Real Estate Investment

A critical administrative omission in a December 2024 Gazette (No. 2414/14) has jeopardized the tax-exempt status of the Rupee Account for Non-resident Sri Lankan Investment (RANSI), threatening long-term diaspora capital. The Policy Crisis • Broken Promise: Investors who entered the market in 2001 under a sovereign guarantee of tax-free repatriation now face a "procedural trap." • Currency Erosion: While investors face a 300% currency depreciation (from 90 LKR/USD in 2001 to ~310 LKR/USD in 2026), the Inland Revenue Department (IRD) is now attempting to levy Capital Gains Tax on nominal rupee gains. • Administrative Lapse: The 2024 "Negative List" for Tax Clearance Certificates (TCC) includes "hot money" (stocks/bonds) but omitted RANSI real estate exits, creating a Kafkaesque nightmare for "sticky" capital. Legal & Economic Context • Statutory Protection: The Finance Act, No. 11 of 2002 and Inland Revenue Act, No. 24 of 2017 (Section 203) explicitly mandate the "grandfathering" of these perpetual exemptions. • Sector Impact: This oversight affects the real estate and construction sectors, which relied on diaspora wealth as a stable foreign exchange source during periods of volatility. • Risk Factor: The current "selective enforcement" is viewed as a violation of the Doctrine of Legitimate Expectation and Article 12(1) of the Constitution. The Remedy • Experts urge the government to issue a supplementary Gazette under Section 86(7) to restore the RANSI exemption, preventing potential Fundamental Rights lawsuits and a total loss of investor trust in Sri Lanka’s emerging market status.