Islamabad: On Wednesday the government approved numerous law amendments to provide income tax, sales tax and custom duty exemptions to the port of Gwadar and free zone until 2039, according to the news sources.
The decision was made at a meeting of the Economic Coordination Committee (ECC) of the cabinet, with Advisor to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair. The advisor requested the law ministry to come up with a legal cover (a presidential ordinance or a bill) for this decision. The Federal Board of Revenue (FBR), in response, expressed its inability to come up with a statutory regulatory order.
Earlier, the Ministry of Maritime Affairs moved a summary seeking amendments to the 17 clauses of the Income Tax Ordinance 2001, the Federal Excise Duty and Customs Act and the Sales Tax Act, in lieu of the concession agreement between the China Overseas Ports Authority and the Gwadar Port Authority (GPA).
A committee constituted by the ECC agreed with the interpretation of the Law and Justice Division over the separate and unique character of the Special Economic Zone (SEZ) under the SEZ Act 2012, and the Gwadar Free Zone under the Gwadar Port Concession Agreement. The Stakeholders approved the amendments to the 12 clauses of the Federal Excise Duty, Sales Tax Act, Customs Act and Income Tax Ordinance. However, the amendments of the 5 remaining clauses were withdrawn by the Ministry of Maritime Affairs at the time.
Dr Shaikh directed the meeting to resolve this issue at the earliest, and for the law ministry to provide a way out, so this four-year-old dispute may be resolved once and for all.
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