ISLAMABAD: President Dr Arif Alvi Monday signed three bills including "Special Technology Zones Authority Bill, 2021" into law under Article 75 of the Constitution of Pakistan. The president signed into law "The Special Technology Zones Authority Bill, 2021", "The PAF War College Institute Bill, 2021", and "The Legal Practitioners and Bar Council (Amendment) Bill, 2021".
After approval by the president, all three bills became acts.
The Special Technology Zones Authority Act, 2021 to set up an authority to boost the domestic IT sector and attract foreign direct investment in the country by giving 10-year tax exemption to zone developers and enterprises.
According to clause 21 of, "The Special Technology Zones Authority Act, 2021", "Exemptions and Incentives for zone enterprises:-The following shall be the incentives for the zone enterprises from the date of issuance of license for a period of ten years, namely:- (a) Exemption from all taxes under the Income Tax Ordinance, 2001 including tm on profits and gains, income tax, turnover tax, withholding tax, capital gains tax, income tax on dividend income and withholding tax on dividend; (b) Exemption from sales tax under the Sales Tax Act, 1990; (c) Exemption from Customs Duty under the Customs Act 1969 on the import in Pakistan from all Capital Goods including but not limited to materials, plant machinery, hardware, equipment and software, devices, instruments, accessories, attachments, building materials, materials and any other equipment required to perform functions of the zone enterprises, whether or not manufactured locally, for use in zones; (d) Exemption from property tax; (e) Tax exemption on dividend income and capital gains of any venture capital fund (whether local or foreign) derived from investments in the zone enterprises; and (f) permission for opening and maintaining of foreign currency accounts, availability of foreign exchange, full convertibility to foreign currency and repatriation and free transfer of foreign currency to meet the requirements of investors, lenders, contractors, operators, consultants, insurers, re-insurers, vendors and advisors in relation to any compensation amounts, loan repayments, equity and return on equity, profits, works, goods and services in accordance with the foreign exchange regulations of the State Bank of Pakistan for zones."
According to clause 20 of the Act; Exemptions and Incentives for the Authority and for the zone developers.- (l ) The following shall be the incentives for the Authority and zone developers from the date of signing of the Development Agreement, for a period of ten years namely:- (a) Exemption from all taxes under the Income Tax Ordinance, 2001 including tax on profits and gains, income tax, turnover tax, withholding tax, capital gains tax, income tax on dividend income and withholding tax on dividend; (b) Exemption from sales tax under the Sales Tax Act, 1990; (c) Exemption from Customs Duty under the Customs Act 1969 on the import in Pakistan of all Capital Goods including but not limited to materials plant, machinery, hardware, equipment and software, devices, instruments, accessories, attachments, building materials, materials and any other equipment required to perform functions of the Authority, zones and zone developers, whether or not manufactured locally, for use in zones; (d) Exemption from property tax; (e) Exemption on dividend income and capital gains of any venture capital fund (whether local or foreign) derived from investments in the zone developers; and (f) permission for opening and maintaining of foreign currency accounts, availability of foreign exchange, full convertibility to foreign currency and repatriation and free transfer of foreign currency to meet the requirements of investors, lenders, contractors, operators, consultants, insurers, re-insurers, vendors and advisors in relation to any compensation amounts, loan repayments, equity and return on equity, profits, works, goods and services in accordance with the foreign exchange regulations of the State Bank of Pakistan for zones.
Copyright Business Recorder, 2021