ISLAMABAD: The Federal Board of Revenue (FBR) Wednesday issued Gwadar Tax Free Zone Rules, 2021, explaining the tax exemptions, incentives, and tax concessions available to the investors of the zone.
According to the draft rules issued by the FBR, a goods declaration in respect of goods imported for a free zone along with other documents shall be presented.
The goods declaration shall be filed by the investor, or a clearing agent duly authorised. The goods imported into a free zone shall be examined and assessed in accordance with the provisions of the Customs Act, 1969 and rules made thereunder. The exemption granted under the Customs Act and Gawadar Port Authority Ordinance, 2002 shall be applicable to plant, machinery, equipment, apparatus and materials to be used solely within the limits of a free zone and to goods imported into the zone by the investors.
Provided that plant, machinery, equipment and apparatus including capital goods imported shall be retained for a period of at least five years from the date of importation.
Duty and tax free vehicles shall be allowed to be imported by the concession holder and its operating company for construction, development and operations of Gwadar Port and free zone area under the regulatory mechanism.
The regulatory mechanism for such vehicles, including the number and types importable, shall be devised by the Ministry of Port and Shipping and the FBR, in consultation with the provincial government if so required, and shall be notified by the FBR. An investor providing logistic services may import vehicles and equipment, free of leviable duty and taxes proportionate to their operational requirements determined under the regulatory mechanism devised and after recommendation from the authority, the FBR added. The rules added that the concession holder, its operating companies and contractors/subcontractors may import materials and equipment (plant, machinery, appliances and accessories), exclusively for construction and operation of the terminals and the free zone area subject to filing a goods declaration to that effect. The “concession holder” means China Overseas Ports Holding Company Limited or any other company having rights from the Gwadar Port Authority to develop, manage and operate Gwadar Free Zone in terms of concession agreement signed under Gwadar Port Authority Ordinance, 2002.
CEO China Overseas Ports Holding Company and Sec Maritime Affairs will hold a press conference today, 8th October, 2019.
Speaking on the occasion, Chairman of China Overseas Port Holding Company honorable Mr. Zhang Baozhong said the project of Gwadar Port was first awarded to a Singaporean company that wasted many years without starting the work. He said the incumbent government of Pakistan took immediate steps to resolve our problems. The government proved that it believes on practical work.
Honorable Mr.Zhang Baozhong said people of Gwadar are very hardworking and peace-loving and a bright future awaits them with the development of Gwadar Port and other infrastructure in the city. He assured that billions of dollars of investments will be made in Gwadar that will provide a large number of jobs to the local people. He said Gwadar will become a new economic hub of Pakistan.
The CEO of China Overseas Port Holding company appreciated the Pakistan government a promising, Pakistan Army and other institutions in providing maximum facilitation to Chinese companies working on various projects in Gwadar.
Minister for Maritime Affairs Ali Haider Zaidi says work at various projects in Gwadar continues at fast pace to develop the port city to an international standard.
Addressing a news conference in Islamabad on Tuesday afternoon, he said Pak-China Friendship Hospital will be constructed at a cost of 100 million dollars to provide state of the art medical facilities to people.
The hospital is planned on 68 acres of land and one out of six medical blocks and almost twenty percent of the residential blocks are completed.
The Minister said a 300-megawatt coal-powered plant is also being set up in Gwadar. A plant to treat hard water for human consumption is also being established. It will process five hundred thousand gallons of water.
Ali Haider Zaidi said work on Gwadar airport is underway and it will be an international airport with world-class facilities for passengers and cargo handling.
ISLAMABAD.: The National Development Council (NDC) has decided to grant tax concessions to business units that would be set up at the Gwadar Free Zone under the China-Pakistan Economic Corridor (CPEC) — an issue that has remained in limbo for the last three years over fears that the move would adversely impact other economic zones of the country.
The NDC — a body formed to give a formal role to the military in economic policymaking — directed the prime minister’s finance adviser to notify the sweeping concessions, sources in the Ministry of Finance told The Express Tribune.
The meeting of the forum, presided over by Prime Minister Imran Khan and with army chief General Qamar Javed Bajwa in attendance, was held on Thursday.
The sources said finance adviser Hafeez Shaikh had assured the NDC that the matter would be resolved soon.
But the adviser will require a report giving the nod to the move from an inter-ministerial committee, which has been looking into the matter for quite some time.
The sources said that because of the NDC’s intervention, the matter would soon land in the Economic Coordination Committee (ECC) of the Cabinet for approval.
Earlier, Shaikh had instructed the Ministry of Finance to fast-track the process but the matter remained unresolved.
Progress on CPEC projects has come to a grinding halt since the Pakistan Tehreek-e-Insaf (PTI) government has come to power.
There has been little headway in the second phase of CPEC and the prime minister on Friday chaired a meeting to address the issues delaying the setting up of the CPEC Special Economic Zones.
Gwadar Port is described as the most significant strategic pearl in China’s plan of expanding its influence in the Arabian Sea — a move that India sees as a threat to its hegemonic designs.
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’.
The Gwadar Free Zone is part of the overall port city’s development plan. The original Gwadar Port Concession Agreement was signed between the Gwadar Port Authority and the Port of Singapore Authority, which the ECC approved in 2007.
In February 2013, the China Overseas Ports Holding Company Limited (COPHCL) took over the operations of the port from the Singaporean company. The concession agreement included tax holiday for both the Gwadar port operators and the businesses being set up there.
The previous government of the Pakistan Muslim League-Nawaz (PML-N) had notified a 23-year tax holiday for the port operator but the issue of similar concessions for industrial units remained pending.
The first phase of the Gwadar Free Zone was completed in January 2018 and the light industries that are being set up there are waiting for a notification to import construction and raw material, according to an official working at the free zone. The COPHCL, however, did not officially comment on the matter.
The ECC took up the issue in February this year but deferred making a decision because of a difference of opinion among various ministries.
The Ministry of Maritime Affairs proposed that the income derived from the Gwadar Free Zone should be exempted from tax for 23 years, starting from the date of notification. It also suggested that the contractors and the sub-contractors of the free zone should be exempted from paying income for 23 years. Besides, it also proposed giving tax relief on the profit on debt by foreign lenders of the free zone for the same period.
According to another proposal, all visiting foreign and local ships and fishing vessels at the Gwadar Port and business established in the free zone should also be exempted from paying import duties.
The ECC directed the Board of Investment, the Ministry of Planning, the Ministry of Maritime Affairs, the Law Division and the Federal Board of Revenue to review the proposals and provide their feedback to the committee.
The sources said the FBR was not comfortable with giving sweeping tax concessions to the business units and sub-contractors.
Instead, it proposed that a business unit should either avail a 10-year tax holiday available under the Special Economic Zone Act 2011 or under the Export Processing Zone statutory regulatory order.
The FBR officials argued that the country was suffering an annual loss of Rs970 billion because of tax concessions and exemptions given to various sectors. They said new concessions could not be notified without amendment in the law.
At the ECC meeting in February, Prime Minister’s Commerce and Investment Adviser Abdul Razak Dawood had also expressed similar views about instrument of tax concessions.
Dawood wanted that the Gwadar Free Zone should only be granted concessions offered to other economic zones.
However, the Gwadar Free Zone does not fall under the Special Economic Zone Act of 2011. It is being set up under a special arrangement with Beijing.
Road trips are the best way to discover a land, and Pakistan, with its geographical diversity and opportunities, makes it ideal for a road trip adventure. However, this aspect is largely overlooked with negative news and views engulfing us.
Sometime back I went on a three-day trip from Karachi to Gwadar and I can, without doubt, say that it was the most eye-opening and memorable trip for years to come. Therefore, I thought that it would be great to share this fabulous part of Pakistan with others. The one-way trip is 650 km long and takes about seven hours to cover.
>Destination Gwadar Expo – Gwadar Port Authority
Leaving Karachi on a fine morning, you head towards Hub. Hub is an industrial centre of the country located just within the perimeters of Balochistan.
Leaving the town of Hub, you pass the Sonmiani ridges and beaches on opposite sides. Approximately 90km from Hub is where you reach the ‘Zero Point’, where you move onto the Makran Coastal Highway.
From Zero Point to Kund Malir
Once on the Makran Coastal Highway, the landscape changes. For half an hour or so, on both sides are vast flat lands with some instances of green, cultivated fields. However, soon the landscape becomes delightful and interesting as you leave the plains behind entering into the Makran Range.
The first attraction is on the left side where there are various active mud volcanoes out of which the most prominent are, Chandragupt I and II.
Travelling an extra hour, you reach the serene Kund Malir beach, a rising weekend destination for Karachiites. The sand at Kund Malir is extremely clean as compared to the beaches of Karachi and the greenish-blue sea shines in the sunlight all day long. A number of dolphins can also be spotted here jumping out and diving back into the water.
Kund Malir to Ormara
The gradient of the road changes rising towards the highest point on the Coastal Highway, the Buzi Pass. Cruising through mountains on both sides of the road, it is a surreal experience. Sea and wind erosion have chiseled rocks into interesting and grotesque rock formations scattered across the area.
One such example is the Princess of Hope, named by Angelina Jolie during her visit in 2002. However, the gradient becomes flattered near the town of Ormara. The hammerhead rock jutting into the sea is one of its salient features.
Ormara to Gwadar
Ormara is about halfway on the Karachi to Gwadar journey. Activity in Ormara, like other towns in the area, centers around fishing. Therefore, it is a suitable place for a stopover for lunch or just for the purpose of breaking the journey.
In between Ormara and Pasni lies the Buzi Makola Wildlife Sanctuary, which is an inlet of the sea and a haven for migratory birds coming from Siberia in search of warm waters during winters. It is of particular interest to birdwatchers and photographers alike.
Near Pasni, the area is again hilly all the way till Gwadar. Pasni is also second only to Gwadar in terms of fishing industry in Balochistan.
Right now is probably the best time to visit Gwadar and witness it in its developing stages and its relatively raw feel. There are various attractions in Gwadar such as the hammerhead, Omani Fort, boat-making yard and the Gwadar Port.
Gwadar is unique in the sense that it has two large bays. The East Bay is where the Deep Sea Port is located. The city is exposed to the sea from three different directions thus, shaped like a neck. Gwadar also has two hills, the Koh-e-Mehdi and the Koh-e-Batil.
The last town before the Pak-Iran border is Jiwani. It is a great place to visit for its spectacular sunsets. Visitors can also see the Queen Victoria hut maintained by the Pakistan Coastguards and built on her orders during World War II.
During the war, Jiwani had over 20 airfields where British pilots came to rest and refuel. Some of these can still be visited and have historical markings and name tags of British pilots. The sea here is quiet shallow, in fact, I spotted a number of motorcycles being driven on the sea with fishermen attaching their boats to them and hauling them in!
Pishukan — the highlight of the trip
Pishukan is a scenic place which, unfortunately, hardly gets any tourists. It is located at about a half an hour’s drive from Gwadar and is a small town along the sea where the population depends on fishing. In the future, it is planned that the Gwadar Jetty will be shifted here.
Driving to the top of the cliff near the coast is a majestic experience to say the least. The crystal clear waters and vibrant fishing boats make a sight to behold. On the other side of the road is a desert landscape with rippled, rolling sand dunes blowing over the tarmac. In addition, the track to Ganz village reveals mesmerizsing cliffs and table-top mountains. Ganz village itself is fabled for the blonde hair, blue-eyed and fair complexioned people who are believed to be of Portuguese descent.
Climate of Gwadar
The climate of Gwadar is located at 0 metres (0 ft)–300 metres (984 ft) meters above sea level, features dry and hot arid climate. The oceanic influence keeps the temperature lower than that in the summer and higher in winter. The mean temperature in the hottest month of June remains between 31 °C (88 °F) and 32 °C (90 °F). The mean temperature in the coldest month of January varies from 18 °C (64 °F) to 19 °C (66 °F). The uniformity of temperature is a unique characteristic of the coastal region in Balochistan. Occasionally, winds moving down the Balochistan plateau bring cold spells, otherwise, the winter is pleasant. In Gwadar, winter is shorter than summer. Gwadar’s weather is identical to that of the Middle East as most rain occurs from December till January. The highest rainfall of 227 millimetres (8.9 in) in 24 hours was recorded on 6 June 2010.
Accommodation and security
Earlier, when people visited Kund Malir, they couldn’t spend the night there due to the lack of accommodation services. However, now a 20-room hotel has been built, with room costing around Rs3,000. But it could be higher on Expo time
Gwadar, on the other hand, has various hotels and places for staying. The security situation is stable, contrary to popular belief about the area. The entire length of the highway is safeguarded by Pakistan Coastguards’ check posts and watchtowers. The fact that a restaurant in Ormara is run by a Pathan from Chaman reflects the safe and harmonious conditions that prevail within the region.
China Overseas Ports Holding Company Pakistan (Pvt.) Ltd
Pakistan’s economic performance has improved significantly in the recent years, reflecting a strong commitment and a series of serious efforts undertaken by the Government and people of Pakistan. The inception of Gwadar Deep-Sea Port is to further enable economic development of Pakistan over the next decade and beyond.
Gwadar has enormous potential from all angles & dimensions for any kind of business activity, whether known or emerging with ever-developing technologies. Being a Deep Sea Port and because of its location it will be a gateway & hub of world businesses & trades and will cater for all types of international commercial activities generated from one business to another irrespective of quantity, quantum & magnitude.
COPHC Pakistan is a branch company of COPHC which is an emerging and fast-growing company in Hong Kong. It has registered its Regional Office in Pakistan. China Overseas Ports Holding Company Limited, COPHC has proudly taken over the command of recently developed Gwadar Port and Gwadar Free Zone on May 16, 2013, for 40 years (as per the concession agreement). The objective of the company is to develop the region’s most strategically well-located port into a hub of maritime trade in the whole region, including landlocked Central Asian Region (CAR), in general, and of Pakistan in particular.
Gwadar Free Zone Company Limited
A customized platform for global connectivity
The state-of-the-art Free Zone Area will be built on reclaimed land in Northern Harbor (within the port area). The new development covering 923 hectares with a permanent Tax and Duties exemptions would enable us to optimize transport flows.
For Gwadar Port to remain a viable alternative for transport-dependent industries, access to and from the Free Zone is being developed by the authorities.
Free Zone Businesses – Including but not limited to
Value addition to imports – Supporting Services Business Offices (Onsite Customs, Financial Institutions, Information Centre, Retail Outlets, Hotels, Restaurants, Entertainment amenities, Medical facilities etc.
Other related businesses
From 2014 to 2025, divided into three stages
Long Term period:
Gwadar Free Zone will be designed with the unique needs of manufacturing, trading, and service Industry businesses in mind.