The Gwadar Tax-free Package has been a crucial part of fiscal budget 2020-21 whose preliminary postulates were under discussion. Recently, the package has been officially announced with major breakthroughs adding essence to the decision.
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 a 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.
The main pointers are highlighted below:
- Safety guaranteed to investors
- No tax or duty on export of machinery and raw material
- The status of the package is guaranteed by the state
- Exemption from income tax and value addition tax
- Goods arriving have to show documented prove of adherence to the Package
The Tax-free package has a validity of 18 years from now- i.e. ending in 2038.
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