Special Economic Zones: Senate passes SEZ Amendment Bill 2016

Aims to reduce cost of doing business and encourage rapid industrialisation

ISLAMABAD: The Senate on Friday passed the Special Economic Zones (SEZ) Amendment Bill 2016, aimed at making the SEZ regime more business-friendly and to  encourage development of SEZs in Pakistan.

The State Minister for Parliamentary Affairs Sheikh Aftab Ahmed moved the bill to further amend the Special Economic Zones Act 2012 in the House. The statement of objects and reasons says the Act was promulgated to encourage industrial infrastructure in the country. This was to be achieved by facilitating domestic and foreign investment in the manufacturing sectors of Pakistan, offering them special exemptions, leading to reduced cost of doing business with efficient infrastructure.

The Act provides for duty free import of plant, machinery and equipment and income tax holidays of 10 years for zone developers as well as zone enterprises. After its promulgation, provincial governments, chambers of commerce and potential investors raised voice about major lacuna in the law whereby SEZs have been declared outside the customs area of Pakistan.

This renders the custom duty exemptions meaningless at the time of imports since the finished products manufactured in SEZs would be liable for payment of heavy customs duty for sale in domestic markets.

However, after the amendments, these companies would be able to sell their products in domestic markets without payment of customs and other duties which would attract more foreign investors to establish their industries in SEZs.

The investor friendly law would encourage rapid industrialisation  in the country leading to create jobs,  transfer technology and develop  industrial infrastructure.

Published in The Express Tribune, October 8^th, 2016.

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