Gwadar Free Zone: China assured 23 years sales tax, other exemptions

ISLAMABAD: Pakistan has assured China for providing Sales Tax exemption for 23 years and other tax exemptions on equipment and material purchased locally for industrial units established in the Gwadar Free Zone.

According to official documents, Pakistan and China appreciated the progress of the construction of the Initial Zone of Gwadar Free Zone offered for luring business attraction. Both the sides agreed that further efforts are needed for business attraction explicitly stipulating sales tax exemption for 23 years and tax exemption on equipment and materials purchased in Pakistan locally.

Pakistan and China also agreed that active efforts such as local tax breaks in Balochistan province and the provision of fiber optic communication by the Pakistani side are needed to address the development hurdles of the Gwadar Port and the Free Zone. Pakistan would offer the concessions in a piece of legislation to be tabled before the Parliament for promulgation into an act. Both the sides agreed to the need of fast execution of Gwadar infrastructure and assistance projects including the New Gwadar International Airport (NGIA), Gwadar Vocational and Training Centre, expansion of China-Pakistan Government Faqeer Colony Middle School and construction of the Pak-China Friendship Hospital and Eastbay Expressway. To advance the integrated development of Gwadar Port and the Gwadar region, both the sides expressed satisfaction on the progress of Gwadar Free Zone development.

The Phase-I of Gwadar Free Zone had been completed and all plots have already been leased out to more than 30 Pakistani and Chinese investors registered in the Free Zone. The annual Gwadar Expo, Gwadar Marble and Mineral Exhibition and other business events have been promoting Gwadar as an emerging regional economic hub of Pakistan. The Ministry of Commerce and Federal Board of Revenue confirmed the condition of Gwadar Port as a capable entrepot of transshipment to Afghanistan in official letters and have sent management teams to the Gwadar Port. Both sides agreed to give continued priority and active advancement to the development of the Gwadar Port. The last JCC appreciated the efforts of the both sides for finalization of the Gwadar Master Plan report submitted by the Fourth Harbor Engineering and Design Institute of CCCC (China Communication Construction Company). The JCC appreciated that the construction of New Gwadar International Airport (NGIA) officially started on Oct 31, 2019 and the timelines of milestones will be ensured. The ground-laying ceremony of the 300MW coal-fired power plant was held on Nov. 4, 2019 to relieve power shortage in the Gwadar region.

The Chinese side suggested to sign PPA/IA and land lease agreement of the project as soon as possible to obtain financing and start the construction. The LOE process for China-Pakistan Friendship Hospital Gwadar and the Vocational and Technical Institute of Gwadar Port has been completed and EPC contractor was also identified. The preparations for ground breaking of the project are underway. As already agreed in the 8th JCC meeting, the JCC reiterated to include the construction of medical college and nursing school in the 1st phase of GDA hospital Gwadar. The LOE procedure of the 1.2 MGD desalination plant has been completed; the Chinese side will identify the management unit according to procedures and send teams to the plant site for professional visit. The Pakistani side will provide all necessary support for the convenience of such visit. Future projects for water supply to Gwadar would be considered after the completion of the 1.2 MDG plant based on the actual needs of the local population.

The JCC highly appreciated the medical services provided to the Gwadar local population by the four teams of medical staff sent by Red Cross Society of China. According to the agreement between Red Cross Society of China and Pakistan Red Crescent Society, the Pakistani side will take over the Fraternity Emergency Care Center in Gwadar by September 2020. Both the sides agreed that the handover shall be conducted in an orderly manner to ensure the continued and smooth operation of the facility. The Research and Development International and Pakistan Ministry of Health have signed the MoU on AI-assisted Cervical Cancer Screening Project in Gwadar to provide free screening services to 10,000 Pakistani women.