ISLAMABAD: President Asif Ali Zardari on Monday signed the Special Economic Zones (SEZs) Bill 2012, under which local and foreign investors will be provided with tax incentives and other facilities to attract them to invest in these special zones.
“After this bill has become the SEZs Act 2012, it will ensure consistency regarding SEZs whatsoever the regime. The bill has already been approved by the two houses of parliament and this legislation will prove an ‘important tool’ to fast track investment and economic activities in Pakistan,” said a senior official in the Board of Investment (BoI).
It would also help boost foreign investors’ confidence and improve investment inflows, he said. Nobody could change the policy except parliament once the law is in place. The new law would bring about consistency in government policies, allowing investors to work without any apprehensions of changes or withdrawal of incentives given to them in the SEZs, the BoI official stated.
“This law extends to the whole of Pakistan and allows establishment of SEZs anywhere in the country over a minimum area of 50 acres. There are several incentives to developers of SEZs and entrepreneurs setting up the industry in the zone,” he said.
“The developers and entrepreneurs will get one-time exemption from customs duties and taxes for all capital goods imported into Pakistan for the development of SEZs. Ten-year tax holiday, both for SEZ developers and enterprises, is also allowed under the law, starting from the date of signing of the development agreement,” he added.
All SEZs, whether public, public-private or private to be governed under this SEZs Act 2012 and the Board of Approval (BOA) headed by the prime minister with the minister for finance as the vice chairman, would meet as frequently as required but not less than twice a year and decisions would be taken by a majority of the total membership present and voting, he said.
The official said that China had offered to set its economic zones in Pakistan, whereas Turkey was also interested and the government was also negotiating with Japan. The individual projects could also be dealt as special economic zones if it fulfilled the criteria, he said.
Under the law, no tariff advantages will be provided, except on capital investment. It can also declare old investments like existing industrial areas as SEZs. Army can also become part of it and can invest in it.
This will also improve efficiency and competitiveness of the industry by creating industrial clusters of big industrial projects where the government is committed to providing infrastructures at the doorstep of the SEZs, an official explained.