The Sri Lankan Government is planning on a rebranding of Colombo Port City, which is a Chinese investment, as Colombo Financial City in Abu Dhabi and Dubai.
State Minister of Investment Promotion Dilum Amunugama told Parliament that the launch of the Colombo Financial City will take place next week, with former UK Prime Minister David Cameron leading the effort.
Port City Colombo is a city development built as an extension close to Galle Face Green, spanning 269 hectares of reclaimed land from the sea.
With breakwater, and the sea area, the Colombo Port City is around 446 hectares.
On the 20th of May 2021, the Sri Lankan parliament passed legislation to establish the Colombo Port City Economic Commission for the administrative operations of the Colombo Port City.
In the Sri Lankan parliament it was revealed that the Colombo Port City will be rebranded as the Colombo Financial City.
What is a ‘Financial City’?
A Financial City is a region that allow for transactions to take place with special tax concessions, and tax exemptions.
In addition, these are also called Tax Haven’s.
Switzerland is one of the most famous tax haven’s on earth, and that is why the term ‘Swiss Bank Account’ is popular.
In addition to Switzerland, Macau, Hong Kong, Singapore, British Virgin Islands, St. Kitts & Nevis, Panama, Puerto Rico, and the Seychelles are tax havens that cater to an elite clientele.
As financial transactions can take place freely in these regions, they are also considered as the best places to launder money in a massive scale.
Will the Colombo Port City become a tax haven?
The administrative operations of the Colombo Port City is carried out by the exclusive Colombo Port City Economic Commission.
Interestingly, certain laws and regulations of Sri Lanka will not apply to this region.
Notably, multiple tax legislations do not apply to the Colombo Port City, namely;
The Inland Revenue Act
The Value Added Tax Act
The Finance Act
The Excise (Special Provisions) Act
The Customs Ordinance
The Ports and Airports Development Levy
The Sri Lanka Export Development Act
The Betting and Gaming Levy Act
Termination of Employment of Workmen (Special Provisions) Act
The Entertainment Tax Ordinance
The Foreign Exchange Act and
Casino Business (Regulation) Act
In addition, tax exemptions and incentives can be provided for operations.
Sri Lanka should have a separate plan to generate an income, if it becomes a tax haven.
Therefore, it is questionable as to how it can be achieved when transactions are released from every possible law that would generate tax revenue.
Incidentally, it is former British Prime Minister David Cameron who will be leading the effort to rebrand the Colombo Port City to the Colombo Financial City.
Who is David Cameron?
David Cameron was the UK Prime Minister from May 2010 until July 2016.
He was also the leader of the Conservative Party from 2005 to 2016.
In 2016, David Cameron resigned, bringing an abrupt end to his six-year premiership, after the British public took the momentous decision to reject his entreaties and turn their back on the European Union.
He came under fire for breaking Britain’s economy with policies.
Moreover, Cameron also faced serious charges over his business endeavours.
On the 9th of August 2021 following a BBC expose’ it came to light that David Cameron made about $10m from Greensill Capital before the finance firm he lobbied on behalf of collapsed.
Greensill abruptly went bankrupt some two years ago.
David Cameron was at the center of controversy into his business dealings after revelations that he lobbied former colleagues by text message and over drinks on behalf of a finance firm.
Cameron from the Conservative party had directly lobbied senior Whitehall officials and the chancellor, Rishi Sunak, the current Prime Minister of the UK.
David Cameron, the former British Prime Minister is goind to lead the rebranding of the Colombo Port City, with such a history.
Dilum Amunugama, the State Minister of Investment Promotion said that Cameron was hired by the Chinese firm involved in the Port City, and not the government of Sri Lanka.