Senate body passes “Special Technology Zones Authority Bill, 2021” – Pakistan

0


ISLAMABAD: The Standing Senate Committee on Information Technology and Telecommunications on Tuesday unanimously adopted the “Special Technological Zones Authority Bill, 2021” under which an Authority would be set up to stimulate the national IT sector and attract foreign direct investment into the country by giving 10- annual tax exemption for area developers and companies. The committee met with Kauda Babar in the presidency here on Tuesday.

Officials from the Ministry of Information Technology and Telecommunications briefed committee members on the Special Technology Zones Authority bill, 2021.

Officials explained that it is important to provide institutional and legislative support to the technology sector with internationally competitive and export-oriented structures and ecosystems.

In order to attract foreign direct investment, develop a collaborative ecosystem linking universities, research and technological industry, initiate innovation in production systems and products and increase the standards and quality of technological goods and services in the country.

This will help increase productivity and reduce production costs through high-tech interventions and encourage futuristic entrepreneurship.

It will also help create employment opportunities for educated young people in the country.

Depending on the purpose and rationale of the bill, provide institutional and legislative support to the national technology sector with internationally competitive and export-oriented structures and ecosystem, in addition to developing collaboration between universities, research and technology industry.

This would help create jobs in the tech sector, capitalizing on the youth dividend.

According to article 21 of the “Special Technological Zones Authority Bill, 2021”, “Exemptions and Incentives for Zone Companies: The following incentives for Zone companies from the date of issuance of the license for a period of ten years, namely: – (a) Exemption from all taxes under the Income Tax Ordinance, 2001, including on profits and gains, tax on income, turnover tax, withholding tax, capital gains tax, dividend income tax and withholding tax on dividends; (b) Exemption from sales tax under the Sales Tax Act 1990; (c) Exemption from customs duties under the Customs Act 1969 on Importation into Pakistan of all capital goods including, but not limited to, materials, machinery, equipment, equipment, ” equipment and software, devices, instruments, accessories, attachments, construction materials, materials and any other equipment necessary for the performance of the functions of businesses in the area, whether or not manufactured locally, intended for use in areas; (d) Exemption from property tax; (e) Exemption from dividend income and capital gains of any venture capital fund (whether local or foreign) from investments in companies in the zone; and (f) the authorization to open and maintain accounts in foreign currencies, the availability of foreign currencies, full convertibility into foreign currencies and the repatriation and free transfer of foreign currencies to meet the requirements of investors, lenders, contractors, operators, consultants, insurers, reinsurers, sellers and advisers with respect to indemnity amounts, loan repayments, equity and return on equity, profits, works, goods and services in accordance with the State Bank of Pakistan’s foreign exchange regulations for zones. “

According to article 20 of the bill; Exemptions and Incentives for the Authority and for Zone Developers – (l) The following will be the incentives for the Authority and for Zone Developers from the date of signing of the Development Agreement, for a period ten years, namely 🙁 a) Exemption from all taxes under the Income Tax Ordinance, 2001, including profit and gains tax, income tax , turnover tax, withholding tax, capital gains tax, dividend income tax and dividend withholding tax; (b) Exemption from sales tax under the Sales Tax Act 1990; (c) Exemption from customs duties under the Customs Act 1969 on Importation into Pakistan of all capital goods, including, but not limited to, materials, plant, machinery, hardware, equipment and software, devices, instruments, accessories, attachments, construction materials, materials and any other equipment necessary for the performance of the functions of the Authority, zones and planners zones, whether or not manufactured locally, intended for use in the zones; (d) Exemption from property tax; (e) Exemption on dividend income and capital gains of any venture capital fund (whether local or foreign) from investments in promoters in the area; and (f) the authorization to open and maintain accounts in foreign currencies, the availability of foreign currencies, full convertibility into foreign currencies and the repatriation and free transfer of foreign currencies to meet the requirements of investors, lenders, contractors, operators, consultants, insurers, reinsurers, sellers and advisers with respect to indemnity amounts, loan repayments, equity and return on equity, profits, works, goods and services in accordance with the State Bank of Pakistan’s foreign exchange regulations for zones.

Committee members asked questions about the excerpts from the bill.

Senator Shahadat Awan suggested reviewing the bill clause by clause in order to eliminate any loopholes in the legislation.

Committee chair Senator Kauda Babar urged committee members to look at the issue across party lines for the benefit of the whole country.

PML-N Senator Afnan Ullah Khan supported the legislation and called the bill a very important step towards the development of the IT sector in Pakistan.

The committee members unanimously passed the bill after good deliberation.

The meeting brought together Senators Dr Shahzad Waseem, Seemi Eezdi, Zeeshan Khanzada, Sania Nishtar, Sana Jamali, Palwasha Muhammadzai Khan, Shahadat Awan, Afnan Ullah Khan, Naseema Ehsaan, and officials from the Ministry of Information Technology and ‘STZ Authority.

Copyright Business Recorder, 2021


Leave A Reply

Your email address will not be published.