CSE welcomes progressive Budget 2021 Proposals Directed at Developing Capital Market

The Colombo Stock Exchange (CSE) welcomes the progressive capital market related proposals presented to parliament by Prime Minister Mahinda Rajapaksa at the 2021 Budget Proposals Speech made on 17th November 2020.

Long-term sustainable measures have been proposed by the Sri Lankan Government to encourage companies to list on the CSE, encourage savings and investments among Sri Lankan citizens and improve the attractiveness of Real Estate Investment Trust (REITs) through tax concessions.

As a measure of promoting new listings on CSE a 50% tax concession for the years 2021/2022 has been proposed to be granted for companies listing on the CSE before 31 December 2021 and to maintain a corporate tax rate of 14 percent for the subsequent three years upon listing.

Stock market investment will continue to be exempted from Capital Gains Tax and as an additional measure to encourage stock market investment, the Government has proposed to include investments made in shares of listed companies incurred up to Rs.100,000 per month as deductible expenditures in the calculation of personal income tax.

In a measure that would largely improve the attractiveness of REITs investment, the government has proposed to exempt such investments from capital gains tax and dividends free from income tax. The proposal further seeks to reduce the Stamp Duty applicable to real estate transaction associated with REITs to 0.75 percent (from the currently applicable 4% for property transactions). The CSE, working with the Securities and Exchange Commission of Sri Lanka, introduced REITs as a new investment product on the CSE earlier this year.

CSE Chairman Dumith Fernando commenting on the proposals stated “CSE is pleased to learn of these progressive proposals and we applaud the commitment of the Sri Lankan government to promote capital market development in the country. The tax concessions proposed to draw in stock market investments and encourage companies to explore a public listing will most certainly complement our efforts to develop a larger listed company base. I would like to thank the Hon. Prime Minister, the Hon. State Minister for Money, Capital Markets and State Enterprise Reform and all other relevant officials for these initiatives that will a drive us towards a thriving and more robust capital market.”

Commenting on the proposal to encourage new listings at CSE, CSE CEO Rajeeva Bandaranaike stated “The tax concession offered to companies listing on CSE by 2021 will offer financial benefits to companies and extra impetus to pursue a listing. This proposal offers vital policy support to expedite new listings in the market and greatly complements measures taken by CSE to expand listing rules to attract more companies and streamline the listing process. We believe CSE as a result is well-placed to attract new listings in 2021.”

The post CSE welcomes progressive Budget 2021 Proposals Directed at Developing Capital Market appeared first on Adaderana Biz English | Sri Lanka Business News.

Source From biz.adaderana
Author: Isma Izzath
#SriLanka #News #lka