Govt to set up technology zones authority

Aims to give 10-year tax break to tech zone developers and enterprises

ISLAMABAD:

The government has decided to set up the Special Technology Zones Authority (STZA) through the promulgation of an ordinance aimed at giving 10-year tax exemption to zone developers and enterprises.

Sources said that the government had decided to give incentives to the technology zone developers. The developers would be exempt from all customs duties and taxes for a period of 10 years from the date of signing of a development agreement on capital goods, including but not limited to materials, plant, machinery, hardware, equipment and software, imported into Pakistan for consumption within zones by the authority and zone developers.

The government would also give tax exemption to zone enterprises. They will also be exempt from all customs duties and taxes on capital goods for a period of 10 years from the date of issuance of licence by the authority.

The cabinet, in its meeting held on November 24, was informed that a meeting regarding creation of STZA was held at the Prime Minister’s Office on November 5, 2020.

The goal behind the creation of such zones was to provide institutional and legislative support for the technology sector with internationally competitive and export-oriented structures and ecosystem, in addition to developing collaboration between the academia, researchers and technology industry.

This would help create jobs in the technology sector and capitalise on youth dividend. The creation of the authority would also provide an environment, which would attract foreign direct investment, apart from improving the quality of domestic technology products and services, and fostering innovation.

The prime minister directed that the authority be established under the Cabinet Division, which was further directed to finalise the draft legislation (ordinance) and move a case for its promulgation within two weeks. The proposed draft legislation was shared with the Law and Justice Division for vetting, and the Finance Division, Federal Board of Revenue and State Bank of Pakistan for comments and views, which were incorporated into the draft legislation.

Accordingly, the Cabinet Division sought approval of the cabinet of the draft legislation for the creation of STZA. The prime minister highlighted the need for the creation of the authority for economic uplift and the cabinet fully endorsed the rationale behind the creation of the proposed authority. The Finance Division raised observations over provisions of Section 21(b) and 22(b) of the proposed ordinance and suggested amendments to the said sections.

Published in The Express Tribune, December 2^nd, 2020.

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