The Parliamentary Committee on Public Finance (COPF) has approved the Colombo Port City Economic Commission (Amendment) Bill following detailed consideration. According to a statement issued by Parliament, the amendment introduces limits on income tax exemptions for employees of new entrant authorised persons, while granting a three-year transitional period for existing entities.
These matters were discussed extensively at a COPF meeting held in Parliament yesterday (06 January), chaired by MP Harsha de Silva. During the meeting, committee members sought clarification on the rationale behind revising tax incentives, particularly the decision to restrict income tax exemptions for employees of authorised persons to a transitional period for existing entities and to discontinue such exemptions for new entrants.
The Committee also reviewed proposed changes to application fees and charges, aimed at reducing upfront costs for investors by deferring certain payments until the licensing stage, while ensuring that the revised fee structure remains competitive and transparent. In addition, members queried the alignment of foreign exchange provisions with the Foreign Exchange Act No. 12 of 2017, seeking clarification on the treatment of rupee earnings, currency conversion, and safeguards to ensure consistency with national monetary and financial regulations.
Offshore banking arrangements drew significant attention, with members requesting updates on banking licence applications, distinctions between Port City offshore banking operations and domestic banking activities, and the adequacy of regulatory oversight. The Central Bank’s enhanced supervisory role—covering capital, liquidity, governance, and compliance requirements—was discussed in line with international best practices.
Concerns were also raised over enforcement mechanisms and penalties for non-compliance, with MPs stressing the need for strong deterrent-level sanctions, effective monitoring, and robust reputational safeguards to preserve the integrity of the Port City framework. Officials explained that the amendments are intended to operationalise the Port City, facilitate the approval of new business activities, and strike a balance between investor attractiveness, fiscal discipline, transparency, and international commitments.
Following these in-depth deliberations, the COPF Committee approved the Colombo Port City Economic Commission (Amendment) Bill.
