Special Economic Zones
The Special Economic Zones bill 2010 on 10th September 2010 by the President of Pakistan. The national assembly of Pakistan approved the SEZ Bill 2012 on 13th July 2012. The bill took more than three years for its processing as it involved large consultative process with the provinces and other stakeholders. The incentive package was approved in 2008 by the ECC but it remained under discussion. The cabinet accorded approval in principle for initiation of legislation in 2010. The Council of Common Interests (CCI) also considered the bill due to introduction of the 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 & parliamentary affairs. The upper house (senate) approved this bill in January 2012 and national assembly accorded its approval on 13th July 2012.
1. The law has been made to meet the global challenges of competitiveness to attract FDI. The law/bill will allow to create industrial cluster with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction. The law further envisages to reduce processes through SEZ in Pakistan.
2. The law will ensure consistency and transparency in economic policies beyond political divide and restore economic confidence. The bill will provide guaranty that incentive once guaranty would not be withdrawn due to conflict of interests.
3. Salient features of the draft SEZ Act 2012 include the following:
• It extends to the whole of Pakistan and overrides other laws (anything contrary);
• Zone enterprises have exemption from custom duties etc. on imports of capital goods;
• Exemption from taxes on income for a period of 10 years starting from the date the development certifies that the Zone Enterprise has commenced commercial operations in the relevant SEZ.
4. BOI with the approval of the BOA and after consultations with the provincial governments and concerned SEZ Authorities shall frame rules and regulations necessary for implementation of this Act.
5. The establishment of SEZ’s will attract both domestic as well as international investors. Some of the investor countries like Korea, China and Japan are expecting to benefit from the scheme as it becomes operational. The provincial governments would be requested to start the process as soon as the rules are framed.