Sindh government is reportedly delaying approval of Special Economic Zone (SEZ) Enterprise status to long-term industrial investors in Bin Qasim Industrial Park (BQIP) and Korangi Creek Industrial Park (KCIP) which is hampering industrialization in the province, well informed sources told Business Recorder.
As per Special Economic Zone Amendment Act 2016, the government of Pakistan announced a one-time exemption of customs duties, sales tax and income tax on import of plant and machinery for setting up industrial undertakings in designated Special Economic Zones all over Pakistan. The objective of this incentive was to promote industrialization, GDP growth and job creation for youth.
As per the procedure defined under the Act, the provincial governments, through their respective SEZ Boards were assigned the responsibility to award SEZ Enterprise status to companies setting up plants in the SEZ. These SEZ Enterprises must then apply to FBR to claim the said incentive available under the SEZ Act
According to sources, the Sindh Government has not held its SEZ Board meeting since the last several months and approval of SEZ Enterprise status for several manufacturing companies setting up factories in Bin Qasim Industrial Area has been held up.
"This has become the biggest irritant in promoting investment in the province of Sindh," the sources said, adding that on the other hand, the Punjab Government is welcoming industrial investment by awarding prompt approvals of genuine SEZ Enterprises. The companies whose cases are held up include KIA Lucky Motors, Barkat Frisian, Tecno Auto Glass Ltd, Universal Packaging, Young's Food, Sci Life Pharmaceuticals, Mehran Commercial Enterprises and Pinnacle Pharma.
BQIP & KCIP have been set up over 1200 acres of land in the Pakistan Steel downstream area and in Korangi Industrial Area respectively. They are expected to become the biggest cluster of automobile, steel and pharmaceutical manufacturers in the country. The companies that are in the process of setting up plants in BQIP include KIA-Lucky Motor Co., Al-Futtaim Renault Motors, General Tyre, Hi-Tech Auto Parts, Tecno Auto Glass, Ahmed Glass, Horizon Steel, International Steel, Tayyab Steel etc.
It is pertinent to mention here that Pakistan already ranks very low in the Ease-of-doing-business index due to bureaucratic delays in approval to genuine investors, especially in industrial undertakings. Several BQIP & KCIP investors have approached the Ministry of Industries and Board of Investment, pleading for support to get their SEZ Enterprise status from the Government of Sindh.