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Pakistan approves massive tax exemptions for Gwadar port operators

Discussion in 'Pakistan Economy' started by CHD, May 24, 2016.

  1. CHD

    CHD FULL MEMBER

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    China is developing the Gwadar port as a strategic and commercial hub under its ‘One-Belt One-Road’ initiative. PHOTO: REUTERS

    ISLAMABAD: Pakistan approved on Monday sweeping tax concessions for Chinese operators at the deep-sea Gwadar port and businesses that will operate in the Gwadar Free Zone for up to 40 years to make the Arabian Sea port an important node in Beijing’s ‘One-Belt, One-Road’ strategic initiative.

    The Economic Coordination Committee (ECC) of the Cabinet took the decision on a day when Iran, India and Afghanistan signed a trilateral transit agreement to counter the China-Pakistan Economic Corridor (CPEC).

    Key decisions: ECC approves 23-year tax holiday for Gwadar Port

    The ECC accepted most of the recommendations made by its subcommittee for extending concessions to the China Overseas Ports Holding Company Limited (COPHCL), according to the Ministry of Finance.

    China is developing the Gwadar port as a strategic and commercial hub under its ‘One-Belt One-Road’ initiative that promises shared regional prosperity. CPEC is one of many arteries of the ‘One-Belt One-Road’.

    In 2013, Pakistan handed over the Gwadar port to the Chinese company by annulling a deal with a Singapore company that could not develop the port after taking over in 2007. The ECC further approved amendments in the Gwadar Port Concession Agreement for operating and developing the Gwadar port and free zone.

    Income Tax

    In a major move, the ECC approved a complete income tax holiday for 23 years to businesses that will be established in the Gwadar Free Zone. A Statutory Regulatory Order to that effect will be issued, and the changes will come into force the day the order is issued.

    China irked by delay in Gwadar project

    Under the move, the concession will extend to contractors and subcontractors and COPHCL companies for 20 years. The ECC has also exempted the COPHCL and its operating companies from paying the minimum 1% income tax. Moreover, the ECC approved complete exemption from the 12.5% tax on dividend income and withholding tax for the COPHCL, and its operating companies, including the China Overseas Ports Holding Company Pakistan Private Limited, Gwadar International Terminals Limited, Gwadar Marines Services Limited and Gwadar Free Zone Company Limited.

    Pakistan has also granted tax exemption on profit on debt generated by those Chinese financial institutions that will lend money for construction and development purposes.

    Sales Tax & Excise Duty

    The ECC also exempted the COPHCL, its operating companies and contractors from sales tax and federal excise duty. A 23-year exemption from sales tax and federal excise duty has also been granted to businesses that will be established inside the Gwadar Free Zone. However, if these businesses make supplies and sales outside the free zone, they will be subject to taxation.

    Customs Duty

    Pakistan approved customs duty exemption for the COPHCL, its operating companies, contractors and subcontractors for a period of 40 years on import of equipment, materials, plants, machinery, appliances and accessories for construction of Gwadar Port and the associated Free Zone.

    The exemption has also been extended on import of ship bunker oils for supplying fuels and lubricants to ships used in the port and its terminals.

    Gwadar port to be operational by 2017: Chinese official

    A 23-year duties exemption has been granted on port related businesses to be established in the free zone. The COPHCL can also import vehicles free of any duty.

    Ramazan Package

    The ECC approved a Ramazan package worth Rs1.75 billion for providing relief to consumers in the holy month this year. The package offers Rs4 to Rs50 relief on 22 essential items available at Utility Stores Corporation of Pakistan.

    The USCs will also provide 5-10% discount on over 1,000 items after making due arrangements with vendors.

    Published in The Express Tribune, May 24th, 2016.
    http://tribune.com.pk/story/1109013/massive-tax-exemptions-gwadar-port-operators/
     
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  2. Laozi

    Laozi SENIOR MEMBER

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    gwadar.jpg
     
  3. Clutch

    Clutch ELITE MEMBER

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    The Iran port deal is still pipe dream. Gwadar has the advantage of being ahead in the race substantially.
     
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  4. DESERT FIGHTER

    DESERT FIGHTER ELITE MEMBER

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    Why bring in Iran ? What does bharat or Iran have anything to do with this thread?
     
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  5. Laozi

    Laozi SENIOR MEMBER

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    Gwadar Port is a game changer for Pakistan's economy which is being the focal point of Pak-Chinese CPEC , while India is promoting Chabahar Port which will compete directly with Gwadar for doing business with many Middle Asian Countries.

    Since Pakistan is actively promoting the Special Economic Zone in Gwadar and giving multiple tax incentives for investing in that Zone therefore it is natural for Indians to expect Iran to dole out at least some concessions for Chabahar to make it attractive for foreign investors.
     
  6. Syed Asif Bukhari

    Syed Asif Bukhari FULL MEMBER

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    In another thread , Indians were saying Chabahar has nothing to do with Gawadar and Pakistanis are over reacting . Now , they are comparing Gwadar and Chabahar . I cant understand their mentality . such a big u turn.
     
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  7. Tripoli

    Tripoli FULL MEMBER

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    CPEC is mainly aimed at Chinese-African trade, Chinese-Middle east trade.
    BTW the anti-Iranian middle east countries will never use chabahar.(MOST OF THE MIDDLE EAST):-)

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    Saudi Arabia wants CPEC’s extension to Red Sea, Africa
    [​IMG]
    ISLAMABAD: Saudi Arabian Minister for Economic Planning Engineer Adil Al Faqih on Monday said that his country was keen to work with Pakistan and China and desired that the mega project of China Pakistan Economic Corridor (CPEC) should be extended to the Red Sea and Africa.

    He was talking to Minister for Planning Development and Reform Ahsan Iqbal in Riyadh, said a message received here from Saudi Arabia. The two sides discussed economic cooperation between the two countries.

    Ahsan Iqbal apprised the Saudi minister of Pakistan’s recent economic progress on the CPEC and shared Vision 2025 experience. Engineer Faqih said Saudi Arabia was launching its Vision 2030 and expressed the desire to promote cooperation between the ministries of economic planning of the two countries.



     
    Last edited: May 25, 2016
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  8. Laozi

    Laozi SENIOR MEMBER

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    There is no question that both ports are independent and will mostly cater to the needs of China and India.

    But these Ports will become huge business centres in future and might compete for business from other MA countries.

    Those who say that these ports will not compete with each other or will not bring economic prosperity to the whole region are lying.
     
  9. Kabira

    Kabira ELITE MEMBER

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    China is investing close to $100 billion in Pakistan while India at most will invest half billon $ in Iran, not fair comparison.
     
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  10. Kabira

    Kabira ELITE MEMBER

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    In planning stages, may never happen at this rate looking at state of India. While China is actually investing in Pakistan right now. Also India will never invest $20 billion to reach central asian countries with combined GDP of less then $100 billion. Half billion from India is more then Iran can expect right now.
     
  11. Imran Khan

    Imran Khan PDF VETERAN

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    its called SULEMANI KEERA :lol:
     
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  12. Laozi

    Laozi SENIOR MEMBER

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    The amount of Chinese Investment in CPEC is known to be around 50 Billion Dollars. But there is ambiguity about the nature of Investments, Some call it Investments with guaranteed assured returns while others term it as Loans.
    I could not find any authentic link. If you have do share
     
  13. DESERT FIGHTER

    DESERT FIGHTER ELITE MEMBER

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    36 mouh wala Suleimani keera bhai Ji.
     
  14. Imran Khan

    Imran Khan PDF VETERAN

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    main ne 2 tak suna tha ye koi new model ka ho ga :undecided:
     
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  15. DESERT FIGHTER

    DESERT FIGHTER ELITE MEMBER

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    Whatever it is .. What's your issue ?
    image.png

    india mein paya jata hai..
     
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