PHOTO: REUTERS
Among others, the recommendations include turnover tax exemptions, income tax exemption till 2040 and 100 per cent tax exemption for import and export of locally-purchased raw material, as well as general sales tax (GST) relief on utilities for Small and Medium Enterprises (SMEs) till 2025.
The Board of Investment has given consent to exempting export-oriented companies from turnover tax while the final reply in this regard would be submitted after the Federal Board of Revenue’s (FBR) feedback.
In addition, the board also agreed to the recommendations regarding registration, licensing and facilitation of companies in SEZs as well as setting up a one-stop service window for FBR registration, opening bank accounts, providing visas to employees and easy access to BoI by the CPEC companies.
Sources said the federal government would soon finalise the facilities package for investors and companies seeking to establish themselves in the SEZs.
Following approval of the recommendations by the federal cabinet, the government would also introduce a separate policy for investment in CPEC zones through amendments in the SEZ Act so that investors get legal cover.
As per the draft of the facilities package, a copy of which is available with The Express Tribune, the federal government also intends to take the provinces on board regarding the waivers and tax exemptions for SEZs.
It is proposed that SEZ investors might be entitled to refund claims for taxes made to provincial governments in the same instance as they deposit sales tax.
However, the final decision in this regard would be made after the consensus of the BoI, FBR and provinces.
It is also proposed that SEZ investors would be given 100 per cent exemption regarding withholding tax on import of raw materials not produced in Pakistan.
However, the FBR advised the investors should not be given the facilities for refunds and zero-rated products.
Another proposal in the draft pertained to 100 per cent WHT exemption on dividends remitted by investors to their countries provided that the exports of such companies were 75 per cent above their gross revenues.
Similarly, it has been advised that the SMEs working in SEZs should be provided relief in terms of GST payments for all utilities till 2025.
Another proposal referred to corporate tax exemption for SEZ companies for a period of 23 years similar to the one allowed for Gwadar Port companies.
It is also proposed that the industrial units which exported 75 per cent of their total production might be given further exemption of 12 years till 2040 from corporate taxes.
It is also advised that raw material procured by alternative industries should be exempted from tax payments.
According to sources, the proposal was currently under review by the FBR and other stakeholders and the final decision in this regard would be based on their responses.
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