China welcomes tax exemption for Gwadar uplift

BEIJING: Pakistani government has tabled Tax Laws (Amendment) Ordinance before its Lower House of Parliamentary Committee for getting approval on tax exemptions of all taxes for both Gwadar Free Port and Free Economic Zone that is a welcome step.

The Chinese government highly appreciates the efforts of the government of Pakistan promoting business activities in Gwadar. The National Assembly Standing Committee on Finance and Revenues took up Tax Laws (Amendment) bill recently for kick-starting deliberations on the ordinance in order to convert into law with approval of both Houses of Parliament.

Earlier, the Tax Laws (Amendment) Ordinance was promulgated by President Arif Alvi for granting tax exemption of Income Tax, Sales Tax and Customs Duty. Now the PTI led government wants to convert ordinance into permanent law with the approval of Parliament.

While giving briefing to the National Assembly Standing Committee on Finance and Revenues, the representatives of Federal Board of Revenue (FBR), the country’s main tax collection agency, told the parliamentarians that the proposed bill aimed at providing all those concessions which were provided to Singapore Port Authority but now these incentives were extended to consortium of Chinese Companies so it should be approved with immediate effect.

The FBR high-ups told MNAs that all these tax exemptions were granted to Chinese companies under China-Pakistan Economic Corridor (CPEC). The National Assembly panel will continue deliberations in its coming meetings but it is hoped that approval of this bill would be granted before lapse of given time frame of ordinance. The tax laws (amendment) bill has sought concessions to amend the Income Tax Ordinance, Sales Tax Act and Customs Act.

Chinese companies are playing catalyst role for developing Gwadar Port as a strategic and commercial hub under its Belt and Road Initiative(BRI). The China Overseas Port Holding Company Limited (COPHC) took over operations in 2013 of the port from a Singaporean company. The concession agreement included a tax holiday for both the operators of Gwadar Port and the businesses being set up there.