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Incentives for China-specific economic zones




By our correspondent

ISLAMABAD: The government has announced a lucrative incentive package for a China-specific economic zone containing a five-year corporate tax holiday for investors.

The Economic Coordination Committee (ECC) meeting that was held here on Monday with Prime Minister Shaukat Aziz in the chair approved an incentive package for China-specific economic zones, Dr Ashfaq H Khan, Adviser to the Finance Ministry said at a press briefing.

Dr Khan said the Pak-China economic zone is being established near Kala Shah Kaku interchange. China has announced to set up eight economic zones across the world and Beijing would establish the first such zone in Pakistan. “The incentive package would be exclusively for the Chinese investors in the economic zones.”

Dr Khan said the incentives would also be extended to the joint ventures of Chinese and Pakistani investors but on the basis of equity with 40:60 ratios. In addition, the incentive package also includes exemption for tax on import of capital equipment needed for setting up various industries and also on import of accessories required for establishing the economic zone.

He said federal government would provide electricity, water in the Kala Shah Kaku, while the provincial government will ensure the approach roads to zero point. Moreover, the Board of Investment would also establish its office there to provide one-window operational facilities to the investors.

“This is the follow-up of five-year trade development plan which was signed last year between Pakistan and China. Free Trade Agreement is also the part of trade development plan.” He said under the trade development plan $15 billion trade balance would be achieved in five years, which means export to Pakistan from China would surge by $15 billion and export from Pakistan to China would also increased to $15 billion. He said 3,000 acres of land would be acquired for setting up of Pakistan-China economic zone.


He also disclosed the in the next meeting of federal cabinet, a competition law would be approved through which the cartelisation in various sectors of economy could be checked.

Dr Khan said the Foreign Direct Investment in the country during first seven months of the ongoing fiscal have increased by 123.2 per cent to $3.674 billion from $1.645 billion in last fiscal during the same period. He said that investment through privatisation proceeds swelled to $133 million during seven months, portfolio investment $697 million and GDR $881 million while direct investment has jacked up to $963 million up by 98.3 per cent.