The incentives announced through the SEZ Bill, exemption from customs duties and taxes for all capital goods imported into Pakistan for the development, operations and maintenance of the SEZ; exemption from all taxes on income accruable in relation to the development and operations of the SEZ for a period of 10-year, starting from the date of signing of the development agreement will become affective for the investors.
Salient features of the draft SEZ Act 2012 include: extending to the whole of Pakistan and override other laws, all SEZ whether public, public-private or private-private to be governed under the act; the Board of Approval (BoA) headed by the prime minister with the minister for finance as the vice chairman shall meet as frequently as required, but not less than twice a year and decisions shall be taken by a majority of the total membership present and voting; SEZs will have exemption from customs duties and taxes for all capital goods imported into Pakistan for the development, operations and maintenance of the SEZ; exemption from all taxes on income accruable in relation to the development and operations of the SEZ for a period of 10 years, starting from the date of signing of the development agreement.
The National Assembly had approved the SEZ Bill 2012 on July 13. The Bill took more than three years for its processing as it involved large consultative process with the provincial stakeholders. The incentive package was approved in 2008 by the ECC, but it remained under discussion. The cabinet accorded approval in principle to the initiation of legislation in 2010. The Council of Common Interests (CCI) also considered this bill due to introduction of 18th Amendment. After hectic efforts, CCI approved the bill in August 2011. The bill has further undergone the microscopic examination by the Standing Committee on Law, Justice, Human Rights and Parliamentary Affairs. The Upper House approved the bill in January 2012 and Lower House accorded its approval on July 13.
The law or bill will allow creation of industrial clusters with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction.