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.
“Special technology zones 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,” Khan said in a statement.
“Collaborative efforts and correct course of comprehensive national development through these STZs will lead to the utilization of the immense potential of the youth of Pakistan.”
The leading government body is mandated to promote national innovation system in Pakistan. Amer Ahmed Hashmi has been appointed the chairman of the authority.
Hashmi said the zones will foster skills development, job creation, technology transfer and new economic value generation.
The specific mandate of STZA is to lead the development of special technology zones in the country. The zones will help increase high-tech exports of Pakistan and facilitate technology transfer from major global Science and Technology hubs.
Industrial clusters’ formation has led to rapid industrialisation and social development of countries like China, Japan, and South Korea, and become the global best practice for high-speed growth and development.
The incentives also include immunity from explaining the source of funds to be invested. Besides, exemptions are also available from declaring income and assets for 10 years. The incentives have been granted through a presidential order to promulgate Special Technology Zone Authority Ordinance 2020 on December 2.
The purpose of the ordinance is to provide institutional and legislative support for the technology sector to increase productivity and decrease cost of production through high-tech interventions.
Section 21 and 22 of Special Technology Zone Authority Ordinance 2020 granted incentives for zone developers and zone enterprises. Under Section 22 of the ordinance, exemption from all income taxes (withholding tax, presumptive tax) for a period of 10 years from the date of issuance of licence by the authority was granted.
Exemption was also announced from all customs duties and taxes for a period of ten years from the date of issuance of licence by the authority on capital goods including but not limited to materials, plant, machinery, hardware, equipment and software imported into Pakistan for consumption within zones by the authority and zone enterprises. Exemption from property tax for 10 years from the date of issuance of licence by the authority was also granted.
Exemption was also announced from general sales tax on goods and services on import of plant, machinery, equipment and raw-materials for consumption of these items within zones by the authority as well as zone enterprises, and tax exemption on dividend income and long-term capital gains from investment in a venture capital undertaking for 10 years from the date of issuance of licence by the authority.
Originally published at The news international