The Government has approved 10-year tax concessions for a range of Strategic Development Projects (SDPs) across multiple priority sectors, aiming to attract large-scale foreign and local investment while accelerating economic recovery and long-term growth.
According to official sources, the concessions will apply to projects that meet specific investment thresholds and national development criteria under the Strategic Development Projects framework. The incentive package is expected to cover sectors such as manufacturing, renewable energy, tourism, information technology, logistics, agriculture, and infrastructure development.
Key Concessions
Eligible projects may receive:
- Corporate income tax exemptions for up to 10 years
- Customs duty waivers on the import of capital goods and machinery
- Value Added Tax (VAT) relief on selected project-related inputs
- Additional fiscal and non-fiscal incentives depending on the project scale
Officials say the objective is to position Sri Lanka as a competitive investment destination in the region, especially at a time when the country is rebuilding investor confidence following recent economic challenges.
Focus on Employment & Export Growth
Authorities emphasised that projects granted strategic status must demonstrate measurable contributions to:
- Employment generation
- Foreign exchange earnings
- Technology transfer and innovation
- Regional economic development
Large-scale renewable energy ventures, export-oriented industries, and digital infrastructure projects are expected to receive particular attention under the new framework.
Balancing Incentives & Fiscal Discipline
While business groups have welcomed the move as a necessary step to stimulate private sector expansion, some economists caution that tax concessions must be carefully structured to avoid long-term revenue losses. They stress the importance of ensuring transparency, clear eligibility criteria, and performance-based monitoring.
The Government has reiterated that only projects deemed nationally significant and capable of transforming strategic sectors will qualify for the 10-year concession period.
