Colombo [Sri Lanka], April 11 (ANI): U.S. Ambassador to Sri Lanka and Maldives Alaina Teplitz warned on Saturday in Sri Lanka of the unintended consequences of “nefarious actors” who could try to misuse the easy trade rules of a port city in Colombo, backed by China, as permissive money laundering. shelter amid concerns about tax leaks.
Sri Lanka has introduced draft legislation for a Colombo Port City Commission, which allows for tax cuts, tax-free wages and being an offshore financial center, Economynext reported.
“Any legislation related to the port city must be carefully considered for its economic impact,” Teplitz told reporters in Colombo in an online debate.
“And of course, among these unintended consequences could have been the creation of a shelter for money launderers and other nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would really be ill · Legal “. City would have broad powers to exempt companies from taxes for up to 40 years, although it is not a tax haven in the traditional sense, Economynext reported.
Sri Lanka’s tax revenue has fallen in 2020, causing concerns about debt and the fiscal trajectory, declining credit and the government’s ability to provide vital public services to the people, while managing state-owned enterprises at a loss.
“I recognize that the Sri Lankan government wants to take advantage of the investment that has already been made in setting up the Port City Foundation, but the legislation really needs to be reflected to address these challenges and take care of what it might be like to open doors. to bad practice and unfair competition for the rest of the country, “Teplitz said.
Teplitz said the idea of U.S. Treasury Secretary Janet Yellen to have a global corporate tax was just a proposal with no immediate impact, but Sri Lanka should think about tax concessions in its own interests.
Sri Lanka has been under the worst import controls since the 1970s under the 1969 law, although exchange controls are less draconian.
Sri Lanka’s economy gradually closed with the enactment of an import control law in 1969, while the printing of money put pressure on the rupee, which worsened after the break-up of Bretton Woods in 1971, when the then head of the Federal Reserve, Arthur Burns, printed money to go to a production gap, forcing the dollar to float.
Attempts by Sri Lanka to create numbered accounts as part of the creation of non-resident foreign currency accounts, following the reopening of the economy in 1978, were also resisted by Western nations.
Citizens are also allowed to keep up to $ 15,000, as well as unlimited amounts instead of outside dollars to protect their savings from monetary expropriation, in relaxation of legal currency laws. (ANI)