ISLAMABAD: The government on Wednesday approved a number of amendments to laws aimed to provide exemptions from income tax, sales tax and custom duties to the Gwadar port and free zone until 2039, but could not decide how to give legal cover to the decision.
A meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by the Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh, asked the law ministry to come up with a legal way out — possibly a presidential ordinance or a bill — when the Federal Board of Revenue expressed its inability to issue a statutory regulatory order on the matter.
You might also like
Earlier this year, the Ministry of Maritime Affairs moved a summary seeking changes in and amendments to 17 clauses of the Income Tax Ordinance 2001, the Sales Tax Act, the Federal Excise Duty and Customs Act in line with the concession agreement between the Gwadar Port Authority (GPA) and China Overseas Ports Authority.
A committee constituted by the ECC agreed to the interpretation of the Law and Justice Division with respect to separate and distinct character of the Special Economic Zone under the SEZ Act 2012 and the Gwadar Free Zone under the Gwadar Port Concession Agreement.
The stakeholders agreed on the amendments to 12 clauses of the Sales Tax Act and FED and Customs Act and the Income Tax Ordinance. However, the amendments to five clauses — 126 AC (regarding contractors in Schedule-II), section 153/159 (regarding certificates exemptions) and 126 AC (regarding date/time of exemptions) of the Income Tax Ordinance 200, serial number 100C (VI Schedule) of the Sales Tax Act 1990 and permission of establishment of duty free shop in Gwadar Free Zone which was incorporated earlier in the summary to the ECC — were withdrawn by the Ministry of Maritime Affairs for the time being.
Dr Shaikh told the meeting that the issue that had been lingering on for almost four years should be settled at the earliest, for which the law ministry should suggest a way forward.
