President unveils plans for Sri Lanka’s digital transformation, economic growth

President Ranil Wickremesinghe outlined a vision for Sri Lanka’s future, emphasizing the importance of the digital sector in propelling the nation’s economic growth.

Addressing Parliament yesterday (12), the President addressed concerns raised by the IT industry regarding VAT implications and announced a strategic shift towards fostering research and development.

The President clarified that IT services provided to entities outside Sri Lanka, with payments received in foreign currency, would be exempt from income tax.

While acknowledging the impending VAT increase to 18%, he assured the IT sector of Government support. The increased VAT revenue, estimated at Rs. 1.5 billion, will be earmarked for research initiatives, including a substantial allocation for AI research.

President Wickremesinghe stressed the need for a robust science and technology foundation, announcing the establishment of the Digital Transformation Agency, AI Centre and Digital Technology and Innovation Council. These entities will play a pivotal role in shaping policy, driving innovation and commercializing technological advancements.

Highlighting the critical role of education, the President announced plans to expand existing universities and establish new ones focused on technology and science. Cooperation with foreign partners, including the establishment of an IIT campus in collaboration with India, underscores Sri Lanka’s commitment to becoming a global technology hub.

The President also touched upon the agricultural and energy sectors, outlining plans for technological integration to boost productivity and embrace renewable energy sources. Collaborations with countries like Germany and Australia further emphasize Sri Lanka’s commitment to green technology and global partnerships.

In a bold move to attract foreign investments, President Wickremesinghe revealed upcoming changes to the investment landscape, with the replacement of the Board of Investment (BoI) and the Export Development Board (EDB) by the Economic Commission. The new structure aims to streamline investment processes and encourage international trade.

In concluding his address, President Wickremesinghe called for bipartisan support, urging both the government and the opposition to unite in achieving a scientific and technological revolution. He expressed gratitude for the opportunity to lead the Ministry of Science and Technology once again, emphasizing his commitment to teering Sri Lanka toward a brighter future.

That’s why we want everyone to cooperate with us. Whether you are in the Opposition or whether you are in the Government. Whether you want to join me or not, join me. Let’s all get together and get a scientific, technological revolution in this country. Then, in regard to investments, we’ll bring the laws in which will make the changes. Sometime in January, February, the BoI and EDB will be scrapped.

It will be replaced by the Economic Commission which is to draw investment into the country in all fields. And it will be done quite differently from what we are going to do now. I will brief the members of the House at that time. Then the industrial estates. The investment zones will be separated. And there be an investment infrastructure corporation which will set up the investment promotion zones. We will have the private sector, the Government to do it. All of them will be registered as public companies. And then you will provide the services.

The corporation will oversee and regulate these investment zones. There will be the international trade centre also, which will deal with international trade. So those three will be connected to each other and that is basically what going to be the new structure for foreign investments. We are looking at the Port Commission Act to make it into financial city.

We’ve got the draft we’ve got from Sherman and Sterling. They’ve updated it. They are doing the regulations. So all of you will be able to go through the drafts and look at the new one, which will make provision for offshore financing. I thought I will inform you of what the Government is hoping to do and we want to start next year.

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