Federal govt to approve comprehensive law for Special Economic Zones

[Naveed Yaseen]

By Sajid Chaudhry
ISLAMABAD: Federal cabinet is expected to approve Special Economic Zones (SEZs) law and policy soon to provide the economy a sound industrial base through establishment of Special Economic Zones in all parts of the country including Federally Administered Tribal Areas.

Federal Minister for Investment, Waqar Ahmed Khan, confirmed Daily Times on Saturday that SEZ Act also containing SEZ Policy would be implemented in coordination with all four provincial governments, Azad Jammu and Kashmir government and FATA Secretariat.

Those making investment in SEZs would be given income tax exemption for 10 years and zone developers would also enjoy the same facility. There would be no restriction on industrial units setup in SEZs to sell their production within the country or export it.

Industrial units located in SEZs would be enjoying true zero rating for their imports and the imports of raw materials and all capital goods would be exempted from general sales tax, federal excise duty, withholding tax and customs duty.

A high-powered SEZ Board would be constituted with, Prime Minister as its chairman and all four chief ministers and Prime Minister AJ&K, federal ministers from all economic ministries, and all important national and international chambers would also be given representation in the said board.

Provinces and other federating units would approach the federal government for declaration of any area as Special Economic Zone, the minimum size of which is being fixed at 50 acres. Upon approval from the board, the area would be formally declared as SEZ and zone developers of international repute would be invited to develop their own investment these SEZs with all facilities at international standards for investors. Private sector would develop these SEZs and would also manage such so that interference of governmental organisations is totally eliminated within the zones.

SEZs Development Committees would be formed in each province headed by Chief Ministers with members from public and private sector so that SEZ concept is implemented in letter and spirit.

Under the SEZ policy federal government and provincial governments would provide all infrastructure and services including utilities like water, gas, electricity, telephone, internet and approach roads at gates of the proposed SEZs.

Federal government would also allow the investors to set up their own power generation units and in case excess power is available it could be sold to the distribution companies of WAPDA. To provide the investors ease of doing business in the premises of SEZs no official from provincial or federal department to be allowed to visit industrial units, accept prior approval from the competent authority in each province.

Developers and managers of the SEZs would be responsible for provision of all civic facilities to the investors. However, for facilitating them, Special Police Stations for each SEZ would be set up with educated police staff so that they could help the management of SEZ in case any need arises. Normal police and other law enforcement agencies would have no business inside the proposed SEZs.

Re-construction Opportunity Zones would also be covered under this important legislation for ensuring early achievement of duty free market access benefits from US markets. Introduction of SEZ concept in FATA would help early development of ROZs with the help of private sector and early development of SEZs in this part of the country would help generate much-needed employment opportunities for local youth who have no economic opportunity in their area and are falling victim of indulgence in terrorist activities.

To save the SEZs from land mafia's activities, the new law and policy on SEZs would determine 10 percent area of SEZ for housing and other civic facilities and 90 percent area of SEZ would exclusively be available for setting up of industrial units. Besides, SEZs are being established with hefty fiscal incentives to attract foreign investment in export-oriented industries.

http://www.dailytimes.com.pk/default.asp...2009_pg5_4