Inside Financial Markets

CPEC – FBR to grant tax exemption to Gwadar projects

The Federal Board of Revenue (FBR) has decided to grant exemption of taxes for projects related to Gwadar, including Gwadar International Airport, under China-Pakistan Economic Corridor (CPEC) project.

Sources said here on Saturday that the issue of tax exemption to Gwadar projects was discussed during the progress review meeting on the CPEC projects, which was held under the chairmanship of Minister for Planning, Development and Reform Ahsan Iqbal.

It has been decided in the meeting that all matters related to exemption of taxes for projects related to Gwadar, including Gwadar International Airport, should be resolved within a week time. A meeting on tax exemption to Gwadar International Airport and other projects would be held in the FBR in this regard.

In the past, the Economic Coordination Committee (ECC) of the Cabinet had approved the grant for tax exemption under Gwadar Port Concession Agreement for operation and development of Gwadar Port for a period of 23 years to those establishing business in free zone.

In the last budget, the FBR had given exemption of taxes for the Gwadar Port. Under exemption for Gwadar Port under sections 126A, 126AB, 126AC, 126AD Schedule-II of Income Tax Ordinance, total income of the companies associated with the development of Gwadar Port, as specified in the clauses, be exempted from charging of income tax for specified periods.

The meeting also decided that an integrated security setup would be established for monitoring and controlling of the security mechanism. A Security Steering Committee be formed at the Ministry of Interior on the immediate basis to have a periodic review, while inviting representative from the provinces, different arms (military & paramilitary forces reps) and line departments associated with the CPEC. The committee must meet every month to review the security paradigm. The managers of Chinese companies may also be taken on board. The action would be taken by the Ministry of Interior.

Security requisition for the SSD forces for security of CPEC projects should be initiated immediately by the respective provincial government. Moreover, SPUs be established by all provinces/ Gilgit-Baltistan (G-B) , Azad Jammu and Kashmir (AJ&K) in line with the units established by Punjab and Sindh governments on priority. The action would be taken by governments of AJK, G-B, Balochistan and KPK as well as Ministry of Interior.

On Gwadar East Bay Expressway project, it has been decided that the bidding process to be expedited as the names of Chinese companies have already been received. The process would be completed within 60 days. It has also been decided while selecting the company for undertaking the project, it should be ensured that no company with any history of default in other projects is selected.

The minister for PD&R directed that the existing 2.0 MGD desalination plant be revitalized on immediate basis so that it can provide water to the local population in upcoming summer. An EOI in PPI/BoT mode be floated on immediate basis.

He directed to float EOI for 5.0 MGD plant on BOT basis. The TOR should be finalised on priority by the committee. The GDA was asked to put up loan request for water project within a week. While emphasizing the importance of Gwadar Smart Port City Plan, it was agreed that commercial contract may be finalised so that project is inaugurated during the forthcoming visit of the Prime Minister.

About the Special Economic Zones (SEZ), sources said that the meeting of the JWG on Industrial Cooperation has been summoned. Information on the SEZs as per the standardized template should be furnished prior the next meeting of the JWG. Moreover, a standardized request for proposal (RFP) to create professional and bankable feasibility analysis based on market principles be finalised before the visit of the Chinese expert team by the Board of Investment (BoI) and shared with all provinces/areas by March 20, 2017.

The JWG should focus on proposing standardized industrial policy/incentives as to develop a unified framework in consensus with all stakeholders. The action would be taken by BOI/respective provincial governments.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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