The Islamabad Chamber of Commerce & Industry has called upon the government to move swiftly to remove the tax anomalies in the Special Economic Zones (SEZs) being setup under CPEC as keeping this issue unresolved would hurt investment in SEZs and send a negative signal to other potential investors.
Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry said that local and foreign investors have pinned lot of hopes from SEZs, which were vital for attraction of investment, growth acceleration, jobs creation, import substitutions, exports promotion and taking the fruits of CPEC to the less developed regions of the country. He urged that government should take urgent measures to address all concerns of investors including tax anomalies to these investment projects successful. He said that SEZs were marketed as tax free zones for 10 years for those investors who would start commercial production by June 2020, but now the government has reportedly applied 1.5 percent turnover tax on sales in SEZs, which was in violation of the spirit of SEZs Act 2012.
ICCI President said that SEZ projects were highly capital intensive due to which the investors needed 2-3 years for reaching the breakeven point. He said that imposing 1.5 percent turnover tax on their sales would act as a discouraging factor for potential investors and should be reviewed forthwith. He emphasized that government should thoroughly reconsider the pros and cons of this proposal and withdraw this tax on SEZs to improve the confidence of investors so that they could invest in these zones without any concern.
Rafat Farid Senior Vice President and Iftikhar Anwar Sethi Vice President Islamabad Chamber of Commerce & Industry said that government has initially planned to set up 9 SEZs. However, they said that SEZs would not be fully operational and beneficial to the country until and unless the potential investors were not prepared to invest in these SEZs for one reason or the other. They said that foreign investment has already come down to very low level and it was essential that government should address all concerns of investors in SEZs so that they could move forward for timely execution of their investment projects. They said that moving of courts by investors and their disappointment with the working of SEZs constituted a serious issue and urged that government should accord priority attention to this issue for addressing all concerns of investors.