Government approves tax concessions for Gwadar Port and Gwadar Free Zone
The Gwadar port, being developed by the China Overseas Ports Holding Company Limited (COPHCL), offers numerous opportunities for socio-economic development of Pakistan. The Senate Finance Committee has unanimously approved the tax concessions proposed for Gwadar Port and Gwadar Free Zone in Finance Bill 2020-21. According to the tax concession agreement, the concession holder and its contractors and lenders will have 20-year tax holiday. The concession would accelerate the Gwadar Port and its Free Zone operations. It would further uplift the livelihood of locals by offering socio-economic development opportunities.
ISLAMABAD: The Senate Finance Committee unanimously approved on Tuesday the tax concessions proposed for Gwadar Port and Gwadar Free Zone in Finance Bill 2020-21.
“These concessions would be very useful in operating Gwadar Port and Gwadar Free Zone,” the Finance Committee remarked. “As a result, its people would also benefit in terms of employment and development of the area.”
Ministry of Maritime Affairs Secretary Rizwan Ahmad also attended the meeting.
Earlier on June 18, the maritime affairs secretary admitted that the original Gwadar Port concession agreement offered only 20-year – not 40-year – tax holiday to port operators and there was no provision for extending the tax concession to sub-contractors.
Secretary Ahmad made the disclosure in a meeting of the Senate Standing Committee on Finance, which had called the top bureaucrat to come and produce the Gwadar Port concession agreement with China.
The standing committee had asked the maritime affairs secretary to appear before it as a day earlier the Federal Board of Revenue (FBR) told the committee that it proposed up to 40-year tax holiday for Gwadar Port operators, its contractors and sub-contractors on the recommendation of the maritime affairs ministry.
But the statement made by the maritime affairs secretary revealed that there was no clause in the port concession agreement that guaranteed 40-year tax holiday and also the sub-contractors were not eligible for any tax concession.
“Under Clause 7.1.1, the concession holder and its contractors and lenders will have 20-year tax holiday,” said Ahmad while giving a statement on the status of the Gwadar Port and Free Zone tax concession agreement.
“Were sub-contractors of the contractors eligible for a similar tax treatment?” questioned Senator Farooq H Naek, Chairman of the standing committee, to which the secretary said no.
“The Ministry of Maritime Affairs earlier misguided parliament and breached its privilege,” said the committee chairman.
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