ISLAMABAD: Prime Minister Imran Khan Saturday congratulated the Minister for Maritime Affairs Ali Zaidi and the ministry for finalising "Blue Economy" policy to revitalise the country's shipping sector.

In a message on twitter, he said that the new policy would create more employment opportunities, which would help the country fulfill its enormous maritime potential.

On August 7, Zaidi announced the new shipping policy aimed at boosting the maritime sector, cutting the country's annual freight bill worth $5 billion and reducing reliance on the international shipping lines for trade.

According to the minister, the new policy would expand the maritime sector and earn foreign exchange for the country.

The new policy offers various incentives, including exemption from federal tax on the Pakistan resident ship-owning companies for 10 years, while the ships sailing under the Pakistani flag would be given preference in berthing at the country's ports.

According to the new policy, imports by the shipping companies of small and large ships in Pakistan will be exempted from customs duty until 2030.

The incomes from these ships until that period would also be exempted from sales tax and income tax.

Zaidi said that new Pakistan resident ship-owning companies would pay tax of $0.75 per gross register tonnage (GRT) for the first five years of the operations of each individual vessel, subject to the cut off period till 2030.

After five years, the minister said, Pakistan resident ship owning companies would pay $1 per GRT annually on the income from vessels' operation. He added: "No federal tax will be levied to the detriment of Pakistan resident ship-owning companies during the exemption period."

The minister said that vessels, under the Pakistani flag, would be provided priority berthing at all Pakistani ports, while no preference would be given to the Pakistan National Shipping Corporation (PNSC) in private sector cargo.

He said that the shipping companies could now take advantage of the liberal fiscal concessions and low mark-up rates offered by the State Bank of Pakistan (SBP) under its Long-Term Finance Facility (LTFF) to acquire ships, carrying the Pakistan flag.

Defining the Pakistan resident ship-owning company, the minister told a questioner that it would be a company, which was registered with the Securities and Exchange Commission of Pakistan (SECP) and had its own seaworthy vessels registered under the Pakistani flag.

The minister said that both domestic and foreign investors could avail these facilities.

The SBP would provide long-term financing facility for the purchase of cargo ships, he said. "This policy will also benefit the fishermen," he added.

Copyright Business Recorder, 2020