Govt extends tax holiday for shipping industry up to 2030

KARACHI: The government has decided to extend the tax holiday for shipping companies up to 2030 in an attempt to encourage private investment in the industry, a minister said on Monday.  

“The government has decided to extend the (tax) incentives from 2020 to 2030,” Mir Hasil Khan Bizenjo, minister for ports and shipping said during a meeting with the office bearers of the Karachi Chamber of Commerce and Industry (KCCI).

“Private sector has such tax incentives as PNSC (Pakistan National Shipping Corporation) is availing,” Bizenjo said. “Investors should take advantage of tax-free regime.” 

The government had earlier announced exemption from custom duty, general sales tax and withholding of income tax on import of ships and floating crafts, including tugs, dredgers, survey vessels, and other specialised crafts or bareboat chartered by a local company. The exemptions were valid from 1 July and up to 2020. 

Business leaders complained that registration process for shipping companies is very lengthy. Minister Bizenjo further said the deep water container port will be launched in November. The port can accommodate vessels carrying 13,000 to 14,000 twenty feet equivalent units.

He said the government is seeking investments for the port developments. “Talks with the Asian Development Bank are underway,” he added. “Some Chinese investors also expressed interest.”

On ferry service, the shipping minister said the government will issue operating licences for the national and international destinations under a new policy. He asked local investors to avail this opportunity.

The minister asked the chamber to prepare a plan to participate in the Gwadar port development. He said the ex-minister for ports and shipping constituted a committee to resolve the issues related to port charges. He directed the officials to convene first meeting of the committee after October 30.

Bizenjo was surprised over a recent demand of business community to increase the cargo handling time to 10 days from five days. “Globally, the clearance time is only 30 minutes to one hour,” he said. 

He, however, directed the officials to prepare feasibility reports for the purchase of new scanners to speed up the clearance process. “I have also asked PNSC to increase its fleet size,” he said. 

Earlier, Shamim Ahmed Firpo, president of KCCI said port charges in Pakistan are very high. “It is 14 times higher than Dubai port, 8 times higher than Singapore and even higher than port charges in India,” he said. Firpo further said shipping companies charge variable rates. “There should be uniform rates,” he said.