The Senate on Thursday passed "The Special Economic Zones Bill, 2011" unanimously to devise a policy framework for setting up SEZs and to attract domestic as well as foreign direct investment in the country.
To meet the challenges of global competition and to attract investment for economic development, the Board of Investment (BoI) in consultation with the provincial governments, federal/agencies and private sectors had prepared a framework for the establishment of Special Economic Zones (SEZs) throughout the country.
The Bill encompasses incentive package and policy framework for setting up SEZs. The Council of Common Interests (CCI) had approved the draft of this Bill with consensus and with support of the provincial governments in its meeting held on August 27, 2011.
The Bill was tabled in the Senate by the Leader of House Syed Nayyar Hussain Bokhari. The House passed the Bill unanimously. After approval from the Senate, now the Bill is ready to go to the National Assembly for passage. The National Assembly Secretariat told Business Recorder that the Bill is likely to be passed in the forthcoming session of the National Assembly which would be held on March 12, 2012.
According to the Bill, federal government and provincial governments may establish special economic zones themselves or in collaboration with private parties under various modes of collaboration including public private partnership or exclusively through the private parties. The Bill allows setting up of SEZ anywhere in the country over a minimum area of 50 acres. There are several incentives to the developers of SEZs and entrepreneurs setting up the industry in the zone. The developers and entrepreneurs will get one-time exemption from customs duties and taxes for all capital goods imported into Pakistan for the development of SEZs. Ten-year tax holiday both for SEZ developers and enterprises is also allowed under the law.
The Bill further says that there shell be a Board of Approvals, hereinafter of the BOA consisting of 18 members including its Chairperson: The Prime Minister of Pakistan who shall be the Chairperson of the BOA while Minister for Finance will be Vice Chairman of the Board. The other members included Minister for Production, Minister for Commerce, Minister for State and Frontier Regions Division, two members of the Parliament to be nominated by the Prime Minister one from each House, Chairman of the BOI, Deputy Chairman Planning Commission, Chief Minister of each province, the Chairman of the Federal Board of Revenue, Governor State bank of Pakistan, Secretary BOI, executive heads of the Provincial Investment Boards by whatever names known or if no such Board is established a nominee of the Government of such province, having adequate relevant professional experience, the tenure of such nominees shall be three years, the President of the Federation of Pakistan Chambers of Commerce and Industry, the President of Pakistan Business Council, the President of the Overseas Chamber of Commerce and Industry and a professional having relevant adequate experience to be nominated BOA or on the recommendations of BOI or the Provincial SEZ Authority.
About functions and responsibilities of the BOA, the Bill says that BOA may (i) approve such regulations for the implementation of this Act as are applicable to all SEZs or to a particular group of SEZ or a particular SEZ, (ii) approve or reject zone applications (iii) approve or reject development agreements (iv) examine and decide upon policy issues submitted to it by SEZ Authorities or by developers (v) review and direct actions on annual reports submitted by SEZ authorities etc.
The Bill says that there shall be an Approval Committee that shall be chaired by the Chairman of the BOI and shall consist of (i) executive heads of the provincial investment boards or companies or agencies and where these do not exist a representative equivalent to a provincial secretary designated by the concerned province (ii) representatives of the Ministries of Finance, Commerce, Industries, Production and State and Frontier Region Division not below the level of an Additional Secretary to the Government (iii) private sector representatives representing different sectors and region to be notified, and two co-opted members by special invitation with a three-year term extendable at the discretion of the BOA (iv) with approval of BOA, co-opted members from concerned Federal and Provincial Governments for specific cases.
The Approval Committee shall exercises al such powers and responsibilities as are delegated to it by the BOA, subject to such conditions as it may deem fit etc. According to the Bill a Provincial Investment Promotion Authority shall be responsible within its Province of jurisdiction for the assistance the SEZ authorities and the developers in acquisition and other land related matters including but not limited to necessary easement issues etc.
The Bill further says that the Chief Minister of the concerned Province or a person appointed by the Chief Minister would be the Chairperson of each SEZ Authority while Vice Chairman, who may be the Minister or Advisor in charge of the Investment Department. In case of any grievances, a developer can approach BOA directly or through the SEZ Authority and BOA shall have the authority to consider, modify or set aside any decision.