Pakistan gears up for industrial boom with tax break for Gwadar operators

This file photo shows the construction site at Gwadar port in the Arabian Sea on Feb. 12, 2013. (AFP)
Updated 18 November 2019

Pakistan gears up for industrial boom with tax break for Gwadar operators

  • Chinese firms exempted from sales levies on local purchases for 23 years
  • Ordinance issued in response to a long-standing demand by Beijing

KARACHI: Pakistan’s 23-year income tax holiday and exemptions of sales tax and customs duties to Chinese operators in Gwadar Port and its free zone is expected to create an environment that’s conducive for industrialization in the country, officials said on Monday.
“The tax holiday is for 23 years. After the exemption, the area is expected to witness an industrial boom. Earlier, there were only talks of exemptions sans any material progress. This is the continuation of the vision of government to set up a special economic zone in the country,” Kauda Babar, member of Pakistan’s Senate Standing Committee on the China Pakistan Economic Corridor (CPEC) told Arab News.
The move, he added, could be a major boost for Chinese companies who could “either set up new factories or relocate their units.”
Last month, Pakistan promulgated the ‘Tax Laws Ordinance, 2019’ to amend certain laws, including the Customs Act, 1969 (Act IV of 1969) and the Sales Tax Act, 1990. 
The ordinance was issued in response to a long-standing demand by Chinese companies to be exempted from the sales tax in order to expedite their operations. 
Pakistan has also decided to extend exemptions on equipments and material purchased locally for industrial units located in the Gwadar Free Zone (GFZ). 
The initiative, proposed by the Ministry of Maritime Affairs, was initially resisted by tax authorities who later agreed to an offer of concession through a money bill which is expected to be presented in the parliament soon.
Last week, Chinese Ambassador to Pakistan, Yao Jing, had said that China is setting up 19 factories in Gwadar.
In a tangible development, the Sino-Pak Tire Manufacturing Joint Venture also signed an agreement to invest $600 million to set up a tire manufacturing facility in Gwadar to cater to the growing needs of the market.
The GFZ is being managed by the Chinese but tax concession can be availed by any company operating in the free zone. “Pakistani manufacturers can purchase or rent space in free zone. They will be charged only $8 per square meter per year on lease up to 99 years”, the senator who hails from Gwadar said.
He added that all relevant infrastructure is ready and “if they (investors) want to start setting up factories tomorrow they can. There is no water and power issues in Gwadar.”
Senator Babar further implored the local business communities to take full advantage of the emerging opportunities in Gwadar and its strategic location. “I have talked to many businessmen and they say that the 8/square meter per year is not the big amount,” he added.
However, Pakistani businessmen say they are also investing in other active special economic zones located in the four provinces of the country with a 10-year tax relaxation.
“Government has given an incentive of a one-time duty free import of machinery and many investors have gone for other zones such as Karachi, Lahore and Peshawar and in Punjab, mainly due to proximity,” Syed Mazhar Ali Nasir, Patron in Chief of the Pakistan China business council of FPCCI, told Arab News.
“The advantage of Gwadar is that the imported material will come into the zone without duty and would be reprocessed to export. Joint ventures are preferring Gwadar,” he added.
Senator Babar, for his part, said that he has been requesting the government to declare the the complete area of Gwadar as tax free. “That will benefit the locals as well be a major part of mega developments.”


COVID-19: Pakistani celebrities who have lived to tell the tale

Updated 07 July 2020

COVID-19: Pakistani celebrities who have lived to tell the tale

  • Arab News speaks to notable Pakistanis about their experience testing positive for the coronavirus and the road to recovery 
  • Around 234,509 Pakistanis have so far tested positive, many of them politicians and celebrities from the entertainment and fashion industries 

KARACHI: As more and more notable Pakistanis test positive for COVID-19, Arab News spoke to some members of the entertainment and fashion industries about their experience with the coronavirus, the road to recovery and the lessons learnt along the way: 
Abrar ul Haq, famed singer, politician and philanthropist, told Arab News on Sunday that he suspected he had caught the virus while building a coronavirus hospital in Lahore, and soon learnt that his wife and son were also positive, though his one-and-a-half-year-old daughter was not. The family immediately quarantined in different rooms of the house for almost 20 days and received advice from doctors over the phone while the daughter was sent to live with her grandmother.
Haq said he had used his time in quarantine to produce a song, soon to be released on his YouTube channel, which paid tribute to the doctors and nurses fighting against the coronavirus outbreak.
Yasir Nawaz, a film and television actor and director, and his wife Nida Yasir, a famous morning show host, both tested positive for the coronavirus in May, and quarantined themselves in the upper portion of their house, isolating themselves from their children and household staff. The maids who brought them food were given PPE suits to wear, Yasir said. 
“We used disposable plates and cups and didn’t waste our trash outside but kept it in a separate place on the terrace,” Yasir added. 
An asymptomatic carrier, she tested negative for the virus in 14 days and believes a clean diet and strong immune system might have helped keep her safe from complications.
“I was already taking lots of fruits and vegetables,” she said. “Besides I was regular on Vitamin C, Zinc and Calcium for my general wellbeing, that also worked against COVID.” 
Yasir said she had wanted to donate her plasma but doctors advised that as an asymptomatic carrier, her plasma probably had not produced enough antibodies needed for the treatment, which involves the infusion of plasma from a recovered COVID-19 patient to a recovering one as a source of antibodies, a widely sought method in Pakistan despite limited information on its effectiveness.
Yasir’s husband Nawaz, however, said he had donated his plasma to Dow University Karachi and was informed by the hospital that his plasma had been infused in a number of patients, of which one woman who had been on a ventilator was now recovering. 
Maheen Khan, a 75-year-old top Pakistani fashion designer, said her symptoms included fever, body pains and headache and she also lost her sense of taste and smell.
“I had read a lot about the virus, so I immediately tested myself and after testing positive, just quarantined myself at home for the next 21 days,” she said, adding that she opted for a “holistic approach” to recovery, staying away from all medication except pain killers and eating raw food like mango with yogurt, milk and honey, and taking lots of Vitamin C. She also tried to rest a lot and do breathing exercises. 
“Calm yourself first if hit by the virus, try your best to be cured at your will but if the symptoms still get worse, see a doctor,” Khan said. “At 75, I put myself on strict care as I was the most vulnerable.”