CSE welcomes budget proposals directed at developing the capital market | Daily News

CSE welcomes budget proposals directed at developing the capital market

Dumith Fernando-Rajeeva Bandaranaike
Dumith Fernando-Rajeeva Bandaranaike

The Colombo Stock Exchange (CSE) welcomes the progressive capital market-related proposals presented to parliament.

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 “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.”

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.