SEC Chairman welcomes budget proposals | Daily News

SEC Chairman welcomes budget proposals

The Chairman of the Securities and Exchange Commission of Sri Lanka (SEC), Viraj Dayaratne P.C. (Pictured) commended the Budget Proposals and said it includes several measures to develop the capital market.

As an incentive to promote and popularize Real Estate Investment Trusts (REITS) that was enabled by the SEC by way of its Rules published in the Gazette on July 31, 2020, the proposals state that the investments in REITS are exempted from the Capital Gains Tax and the Dividends are to be free from Income Tax. Further, the Stamp Duty is to be reduced up to 0.75%.

The stakeholders in the industry had perceived the Stamp Duty as an impediment to the setting up of REITS in Sri Lanka and the SEC sees this proposal as a huge boost to setting up of REITS in the country.

In addition, to promote new listings of local companies on the Colombo Stock Exchange (CSE), the Government has put forward certain key proposals such as a 50% tax concession for the years 2021/2022 for companies that are listed before 31 December 2021. The number of companies listed on the CSE has not increased during the last several years and that was seen as a reason for the lack of liquidity and relatively small size of the market. The new proposal will be an impetus for new listings. To page 14

 The SEC wishes to thank President, the Prime Minister and other Ministers and officials for having taken into consideration the representations made by the SEC and for taking these initiatives which will help to develop and build a strong capital market which could benefit both users and providers of capital. These efforts will undoubtedly help deepen market activity and increase access to capital for Sri Lankan corporate.

The CSE has functioned uninterrupted and has performed exceptionally well with an 80% increase in total market turnover as against 2019 and the average daily turnover has doubled.“The steps taken by the joint committee comprising of representatives of the SEC and the CSE to digitalize the stock market in September 2020 has enabled the market to operate without interruption despite the present situation in the country.”