2- Legal Issues2.1- TaxationSri Lanka's tax rate is average for the region, the highest corporate tax is 28%, related in Pakistan -35% and India -30%, Bangladesh -27.5%, Nepal -25% and Maldives -0% Private sector contacts and economists generally admire the government for maintaining a calm fiscal policy and consistent over certain years. For some, persistent taxes are also relevant rather than lower taxes. An unusual omission was the extension in 2013 of the 12.5% ​​value added tax (VAT) to supermarkets and large trading houses. Foreign investors who do not qualify for investment incentives such as discharge or tax and exchange control privileges are required to pay taxes on corporate profits. , dividends and profit transfers. They are also liable to pay VAT on goods and services. An Economic Services Tax (EST) of 0.25% of income applies to BOI-approved businesses that enjoy tax exemptions (US Department of State, 2014).2.2- Labor Laws2.2.1- Market LaborThe Sri Lankan labor market is not large, it is a small market with a limited pool of experienced workers. The engineering, accounting, legal and architectural professions follow high standards, although local design is still underdeveloped. Labor is available at a relatively low cost, but it is estimated to be higher than in some other South Asian countries. Many of Sri Lanka's top graduates seek employment outside the country. For those who remain, Sri Lanka's labor laws provide many protections to employees. Many investors view this legal framework as somewhat rigid, making it difficult for companies to downsize. The cost of terminating an employee in Sri Lanka is, in percentage terms, one of the highest in the world. Sri Lanka's workforce is literate (especially on local land...... middle of paper...... sign of large off-budget spending. Sri Lanka's ranking is the index The World Bank's Corruption Control Index, which ranges from -2.5 to +2.5, fell to -0.46 in 2011 and -0.45 in 2010 and -0.40 in 2009. USAID's 2006 Democracy and Governance Assessment, unreliable information from the private sector indicated an advance in public sector interest that must be paid in bribes A senior economist claimed. that by 2012 Sri Lanka had lost up to two percentage points of GDP increase due to corruption Sri Lanka approved the United Nations Anti - Corruption Convention in 2004. Sri Lanka signed but. does not endorse the convention against transnational organized crime Sri Lanka became a registrar of the OECD-ADB regional anti-corruption plan in May 2006. Experiments to introduce an information law to increase corruption. clarity have failed (US State Department)., 2014).