ICCI for removing tax anomalies in SEZs to attract foreign, local investment

Sep 16, 2019: Islamabad Chamber of Commerce and Industry Monday urged the government for removing the tax anomalies in the Special Economic Zones (SEZs) being setup under China-Pakistan Economic Corridor to promote local as well as foreign investments in these zones.

In a statement, ICCI President Ahmed Hassan Moughal said local and foreign investors have pinned lot of hopes from SEZs, which were vital for attraction of investment, growth acceleration and jobs creation.

These SEZs would also help on producing the import substitutions, exports promotion and taking the fruits of CPEC to the less developed regions of the country, he added.

He urged the government for taking urgent measures to address the concerns of investors including tax anomalies to make these investment projects successful.

He said SEZs were marketed as tax free zones for 10 years for those investors who would start commercial production by June 2020.

Now the government has reportedly applied 1.5 percent turnover tax on sales in SEZs, which was in violation of the spirit of SEZs Act 2012, he remarked.

The ICCI president said SEZ projects were highly capital intensive due to which the investors needed 2-3 years for reaching the breakeven point.

He said imposing 1.5 percent turnover tax on their sales would act as a discouraging factor for potential investors and should be reviewed forthwith.

He emphasized the government for thoroughly reconsider the pros and cons of this proposal and withdraw this tax on SEZs to improve the confidence of investors so that they could invest in these zones without any concern.

ICCI Senior Vice President Rafat Farid and Vice President Iftikhar Anwar Sethi said that government has initially planned to set up 9 SEZs.

They said SEZs would not be fully operational and beneficial to the country until the potential investors were not prepared to invest in these SEZs for one reason or the other.

APP