BoI seeks extension in period of incentives for SEZs
WASIM IQBAL
ISLAMABAD: The Board of Investment (BoI) has moved a summary to the Finance Division asking for extending incentives for the developers and enterprises for Special Economic Zones (SEZs), which will expire on June 2020. A summary is included in the agenda items of the Economic Coordination Committee (ECC) meeting, which has been scheduled for next week, sources said.
The Special Economic Zones Act, 2012 will be amended with an objective to extend the period of incentives for developers and enterprises through Finance Bill 2020-2021, an official of the BOI told Business Recorder.
Under the SEZs Act 2012, zone developers, are granted one-time exemption from all custom-duties and taxes on plant and machinery imported into Pakistan except the items listed under Chapter 87 of the Pakistan Customs Tariff, for the setting up of an SEZ subject to verification by the BOI.
Exemption from all taxes on income accruable in relation to the development and operation of the SEZ are allowed for a period of five years, starting from the date of signing of the development agreement.
For zone enterprises, all zone enterprises shall be entitled to the following benefits, namely:- (a) one-time exemption from custom-duties and taxes on import of plant and machinery into SEZ except items listed under Chapter 87 of the Pakistan Customs Tariff, for installation in that zone enterprise subject to verification by the BOI; and (b) exemption from all taxes on income for enterprises commencing commercial production by the 30th June, 2020, in the SEZs for the next 10 years; “provided that exemption from all taxes on income for those zone enterprises or firms which commence commercial production after the aforesaid date shall be for the next five years.”
On Thursday, the Parliamentary Committee on China-Pakistan Economic Corridor (CPEC) recommended the BOI, the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) to resolve all the issues pertaining to the SEZs on top-priority basis, so that these early harvest projects could be ready for economic activity.
Sources said that the BOI resolved all issues pertaining to taxes and duty exemptions for Rashaki Dhabeji and Faisalabad, however issues with the SBP are yet to be resolved.
General incentives of utilities for SEZs, gas, electricity and others would be provided at the zero-point of the zones.
Captive power generation is permissible to developers of the zones.
A total of Rs13.123 billion is required in funds to provide utilities including 880.3MW electricity, and 393.5 million cubic feet per day (mmcfd) gas to seven SEZs in the current year 2020.
