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Gwadar Export Processing Zone:

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The government is also examining whether to allow sales tax zero rating on supply construction material from tariff area to G-EPZ for investors :

ISLAMABAD: The government is considering a proposal to make 12 types of warehoused goods completely available to the domestic market of the Gwadar Export Processing Zone on payment of taxes and duties, a senior government official told Daily Times on Friday.

The official added that at present industrial units located at different export processing zones had been allowed to sell a maximum of 20 percent of their production to the domestic market and to export the remaining 80 percent.

The warehoused goods that will be allowed for sale in the domestic market from the G-EPZ are automobiles, cotton, hide and skins, unblended tea, spices in raw form, dyes, iron sheets, supari, raw materials for pesticides and insecticides, aluminium ingots, aluminium foils and new print.

The ministry of industries, production and special initiatives proposed this incentive for inclusion in an incentive package to promote investment in the G-EPZ. The proposed incentive package for G-EPZ suggested that apart from the above mentioned warehoused goods, the domestic market of Pakistan will be available to 50 percent of production, on payment of taxes and duties.

The official further informed that, under the Incentive Package, defective goods and waste would be allowed to be sold in the domestic market after payment of applicable taxes and duties to a maximum of up to 3 percent of total export value from G-EPZ.

All exports from G-EPZ will be exempted from all taxes and only local supplies will be taxable. The ministry of industries, production and special initiatives is in the process of establishment of G-EPZ at an area of 1,000 acres with a package of incentives to promote industrial development in the area. The Gwadar Port will enable exports to destinations around the world. The income of the industrial units from the start of their production will be exempt from income tax for the next 10 years. This would be a major incentive to attract local as well foreign investors to the G-EPZ, the official added. The said ministry is finalizing an incentive package for investors investing in the G-EPZ, after consulting economic ministries. The official informed that the said ministry has outlined some incentives and the major incentive of a 10-year tax holiday is a part of the proposed incentive package for investors.

The government is also examining whether to allow sales tax zero rating on supply construction material from tariff area to G-EPZ for investors as well as to the Gwadar Development Authority so that the development of infrastructure like roads, electricity, gas and water could be ensured.