Pakistan will review taxation and tariff related issues for garment units in EPZs
Khaleej Times, United Arab Emirates
ISLAMABAD — Pakistan government has decided to review all taxation and tariff related issues including the Research and Development support for garment units in Export Promotion Zones (EPZs) to attract foreign investment in the country.
Official sources said that the existing taxation and tariff related issues will be comprehensively examined in consultation with ministry of commerce and Central Board of Revenue (CBR) and the case will be submitted to the prime minister for his consideration
The existing tariff and taxation rates for the industries to be set up in the EPZs were likely to be reduced to lure the much needed foreign investment.
Sources said that Karachi is making substantial contribution in software exports and the future prospects seemed even brighter. There were reports, they said, that US firms were on the look-out to software houses and call centre firms that can perform well.
The major reason is that Pakistani market is 30 per cent cheaper that of India and it has under-utilised pool of computer science graduates and English language speakers.
It has been learnt that Pakistan Software Export Board is in the process of conducting a feasibility study but its exact scope is not known. Besides that, no credible survey is available which could shed light on the potential demand of space for hi-tech businesses.
In this behalf the government has asked the concerned officials to conduct a feasibility study which will not only help Export Promotion Zone Authority (EPZA) achieve its objectives, but will also be useful for the government to ascertain the gap which will emerge in future demand and supply.
Sources said the government has asked the ministry of industries, production and special initiatives to formulate a long term plan for attracting local and foreign investment in the country’s EPZs.
Prime Minister Shaukat Aziz believed that EPZs was a great idea that “failed to take off” in Pakistan. It had big potential but somehow it kept on drifting away from its objectives, he said. On the directives of the prime minister, the ministry of industries directed the EPZA to also develop a well thought out strategy which should include an aggressive marketing plan keeping in view the methodologies adopted by Malaysia, Thailand, India and Bangladesh for attracting investment in EPZs.
Based on that strategy, series of short term plans will be worked out for proper execution and monitoring to ensure adequate foreign investment in the zones. The marketing plan will be executed individually by EPZA in association with the Board of Investment (BoI). The proposal for organisational restructuring and corporatization of EPZ has also been in principle approved by the government.
Sources said that the prime minister was the critical of the performance of EPZA and said that it never had a vision or the strategy to pursue its objectives, therefore it was imperative that the organisation’s culture be changed by charting out an aggressive plan and by hiring dynamic people to execute it.
Sources said that the emphasis will be laid to attract prestigious and reputable investors who have viable plans to execute their investment proposals. Top global investors installing even assembly operation would be a good beginning as their best practices bring an element of respectability to the organisation.
It was said that infrastructure is a scarce and an expensive commodity which should not be wasted along with misuse of land and duty free vehicles. Authority has been asked to revamp its contracts, systems, procedures, and sanctions in such a way that transition to good corporate governance becomes smooth and seamless.
Sources said that the development of KEPZ phase-II will be carried on fast track basis which will include building of 5- story building, having recreational areas and a snack bar. They said that all possible legal remedies will be taken to resume the land for KEPZ phase-III along with the idea of having a jetty for direct transportation from port.
A decision has also been taken that the Zones at Sialkot, Risalpur and Gujranwala will be revisited and plans for their re- vitalization or viability be considered afresh. The establishment of EPZ at Gwadar will be executed in the light of the guidelines given by the ministry of industries and production so as to make it “model Zone”.
