FBR shares draft of Free Zone with Law Division: Investors to have legal document on tax exemptions

ISLAMABAD: The Federal Board of Revenue (FBR) has shared draft of the Gwadar Port and Free Zone Rules 2021 with the Law and Justice Division for investors to have a detailed legal document on exemptions and tax concessions available to the companies operating under the said Free Zone.

This has been informed by the FBR officials to the Ministry of Planning and Development during the last meeting to review progress of the CPEC projects at Gwadar.

According to the sources, the government has also decided to exempt Gwadar Port from provincial taxes.

Officials informed the meeting that the representatives of the FBR informed that the draft rules have been shared with the Law and Justice Division for feedback and comments. Once a response from the Law and Justice Division is received, the rules will be published on the FBR website for 15 days to obtain public opinion, and subsequently, the rules would be notified. The representatives of the Government of Balochistan informed that as per directions of the provincial cabinet, they formed a committee under the chairmanship of secretary finance Government of Balochistan, which would look into the matter on case to case basis.

Last year, the federal cabinet had approved amendments in tax laws relating to tax concessions/exemptions with respect to Gwadar Port and Gwadar Free Zone, after the FBR and the Ministry of Maritime Affairs (MoMA) reached an agreement.

The Revenue Division sought permission of the prime minister to consider amendments in tax laws relating to tax concessions/ exemptions in respect of Gwadar Port and Gwadar Free Zone, under the proviso to Rule 18(6) of Rules of Business 1973, as the matter was of urgent nature.

The Revenue Division submitted that the projects being undertaken under the auspices of the China-Pakistan Economic Corridor are vital for promoting national development, fostering economic growth and protecting the strategic interests of the country. The MoMA moved a summary before the ECC regarding approval of various exemptions required for the Gwadar Port and the Gwadar Free Zone. The ECC approved the proposals on August 28, 2019, to ensure the removal of various impediments in the implementation of the concession agreement in respect to Gwadar Port and Gwadar Free Zone.

Copyright Business Recorder, 2021