ISLAMABAD: The Board of Investment (BoI) has devised a plan to give incentives to the developers and enterprises of the special economic zones (SEZ), recommending the Economic Coordination Committee (ECC) to do the needful in this regard.
The BoI has also requested to initiate the process of framing the One Window Act to provide a one-stop-shop facility to the investors (SEZs developers & enterprises).
According to sources, the board sent a summary to the ECC with regard to the revised incentives package under the Special Economic Zones Act 2012.
They said the BoI has mentioned in the summary that the SEZs Act was promulgated in 2012 for the creation, development and efficient operation of SEZs to encourage domestic and international investors. The Act was amended in 2016 to further facilitate the investors and the process of establishing SEZs.
Since the promulgation of the Act, seven SEZs were notified by June 2019, and since August 2019, nine new SEZs have been notified.
Sources revealed the SEZs Act could not effectively contribute towards the industrialisation of Pakistan in its true spirit due to some inherent shortcomings in the law such as slow pace of development and lack of utilities in the SEZs, complicated approval process, cumbersome procedures for availing fiscal incentive, absence of one window operation, misaligned fiscal incentives, weak regulatory and enforcement mechanism and lack of clear policy objectives.
Therefore, despite lapse of considerable time, the colonisation of the earlier notified seven SEZs has remained dismal as only 56 units have so far gone in production (2.40pc of total plots) and another 114 units are under construction (4.89pc of total plots), together accounting for occupancy of a mere 7.3pc of total plots as opposed to 57.6pc of total plots already sold.
Keeping in view the shortcomings of the existing law, Bol has revisited the SEZs Act 2012 and identified the provisions requiring amendment to remove the shortcomings and to make it more business friendly.
However to give an effect to the said amendments, a comprehensive review of the said act and relevant rules are being undertaken considering global best practices and stakeholders consultations, which are expected to be completed by the end June 2020, sources added.
In the meanwhile, an incentives package to attract meaningful export led, import substituting and labour intensive industrialisation through local and foreign investors including the expected Chinese relocation of industries in the SEZs has been prepared by the BOl for the ECC’s approval under Section 34(4) of SEZs Act, 2012 which is to be urgently incorporated in the SEZs Act.
The Ministry of Industries & Production, the Ministry of Commerce, the State Bank of Pakistan, and the Federal Board of Revenue have also endorsed the incentives in principle to extend to developers and zone enterprises in the SEZs.
Sources said the BoI has stated in the summary that the amendments identified and incentives proposed are expected to attract more investment- both foreign and local, accelerate the industrialisation process, create more job opportunities and reduce the current account deficit in line with the manifesto of the present government.