The BoI undertook a benchmark study of the best practices in SEZs in regional countries to develop policy framework for SEZs in Pakistan. - File photo

ISLAMABAD: The Senate approved on Thursday the Special Economic Zones (SEZs) Bill which lays down a policy framework for encouraging establishment of such zones to attract domestic and foreign investment.

The Board of Investment (BoI) had been working on the draft SEZ Bill in close coordination with provincial governments, including Gilgil-Baltistan, Fata and other stakeholders for over a year.

The Council of Common Interests (CCI) had approved the bill in August last with the concurrence of provincial governments for legislation. The bill is now scheduled to be tabled before the National Assembly.

Under the draft bill, moved by Senator Syed Nayyar Hussain Bokhari, SEZs can be set up by federal government or any provincial government or by a private developer. The federal and provincial governments can also set up SEZs in collaboration with private developers. The existing industrial estates and zones in the country can also qualify for the SEZ status as stipulated in the draft law.

The SEZs are expected to reduce rising cost of doing business and provide one-window facility to entrepreneurs.

The purpose is to improve efficiency and competitiveness of the industry by creating industrial clusters of big industrial projects where the government is committed to provide infrastructures at the doorstep of the SEZs.

The bill allows establishment of SEZs anywhere in the country over a minimum area of 50 acres.

There are several incentives to developers of SEZs and entrepreneurs setting up the industry in the zone.

The developers and entrepreneurs will get one-time exemption from customs duties and taxes for all capital goods imported into Pakistan for the development of SEZs.

Ten-year tax holiday, both for SEZ developers and enterprises, is also allowed under the law.

On the passage of the bill by the Senate, the Board of Investment said in a statement that the establishment of Special Economic Zones through an Act of Parliament would be an achievement of the government.

In the past, incentives given to economic zones were withdrawn with the change of regime. To encourage investment, continuity of the policy is very important. The new law would bring about consistency in government policies, allowing investors to work without any apprehensions of changes or withdrawal of incentives given to them in the SEZs, the BoI stated.

BoI Chairman Saleem H, Mandviwalla had informed the Senate Standing Committee on Law, Justice and Parliamentary Affairs that in the backdrop of international competition, countries worldwide have created efficient and competitive industrial clusters and SEZs to reduce cost of doing business.

The BoI undertook a benchmark study of the best practices in SEZs in regional countries to develop policy framework for SEZs in Pakistan.

Delimitation: The Senate also passed the ‘Delimitation of Constituencies (Amendment) Bill 2011 which was moved by Minister for Law, Justice and Parliamentary Affairs, Maula Bakhsh Chandio.