IN a step further towards industrialization, Prime Minister Imran Khan on Friday launched the Special Technology Zones Authority that envisages comprehensive duty and tax incentives for a period of 10 years to local and foreign investors. In a statement, he said the Authority will serve to create a space for foreign investors, indigenous companies and educational and training institutes to collaborate for information technology driven industrial revolution in Pakistan.
The measure is likely to yield the intended benefits if implemented on a fast-track basis and in letter and spirit as not only a Chairman of the Authority has been appointed but liberal incentives have also been offered to investors through a presidential ordinance. The incentives include exemption from income tax, customs duties and other taxes for 10 years from the date of issuance of license to an investor/entrepreneur. Exemptions would also be available on material, plant, machinery, hardware, equipment and software imported into Pakistan for consumption within zones by the Authority and zone enterprises. Exemption from property tax, general sales tax on goods and services on import of plant, machinery, equipment and raw-material for consumption of these items besides tax exemption on dividend income and long-term capital gains from investment in a venture capital undertaking. Now administrative and legal structure is there and it depends on the ability of the Authority to help expedite the process of different approvals that takes unnecessarily long time in Pakistan and as a result the country is deprived of the benefits of initiatives with potential to bring about a significant change. It also happened in the past that investors took advantage of tax breaks without delivering substantial employment or export earnings. Similarly, we erred while concluding agreements with investors and as a result there was no worthwhile technology transfer and benefits of such programmes went to other economies. We hope that all concerned would see to it that the zones lead to the lofty goal of an increase in high-tech exports of Pakistan and facilitate technology transfer from major global science and technology hubs.
