The Senate Standing Committee on Information Technology and Telecommunication unanimously passed the Special Technology Zones Authority Bill on Tuesday, 2021.
The Senate Committee meeting was held with Senator Kauda Babar in the chair at the Parliament House. The meeting proceedings started with a briefing from officials of the Ministry of IT & Telecom on the Special Technology Zones Authority Bill, 2021
Officials explained that the Bill was necessary to provide institutional and legislative support for the technology sector with internationally competitive and export-oriented structures and ecosystems. They said it would help attract foreign direct investment, develop a collaborative ecosystem connecting academia, research, and technology industry, and initiate innovation in production systems and products. They added that it would also increase the standards and quality of technology goods and services within the country. "The Bill will help increase productivity and decrease the costs of production through high technology interventions, besides encouraging futuristic entrepreneurship," they said, adding that it would also help create job opportunities for the country's educated youth.
The Committee members, however, raised questions on the excerpts of the Bill. Senator Shahadat Awan suggested reviewing the Bill clause-by-clause to remove any lacunas in the legislation. Senator Palwasha Khan also expressed her reservations over the contents of the Bill and questioned the officials regarding the remuneration of employees and staff of the said authority. The officials told the Committee members that all the pay scales were following directives of the Finance Division and irregularly did not do.
Senator Dr. Shahzad Waseem, who is also the Leader of the House of the Senate of Pakistan, underlined the urgency of the matter and urged that the Committee should unanimously pass the Bill on an urgent basis. He assured the opposition members of the Committee that any amendments proposed by them would be considered and taken up in the future.
Chairman Senator Kauda Babar urged the Committee members to look into the matter beyond party lines in the whole country's interest.
Senator Afnan Ullah Khan of Pakistan Muslim League-Nawaz supported the legislation and termed the Bill as an essential step toward developing the IT sector in Pakistan.
The Committee members unanimously passed the Bill after due deliberations.
Seemi Eezdi, Zeeshan Khanzada, Sania Nishtar, Sana Jamali, Shahadat Awan, and Naseema Ehsaan attended the meeting alongside officials from the Ministry of Ministry IT and the Special Technology Zones Authority.
According to the object and reasons of the Bill, to provide institutional and legislative support for the national technology sector with internationally competitive and export-oriented structures and ecosystem and develop collaboration between academia, research, and technology industry. It would help in creating jobs in the technology sector, capitalizing on youth dividends.
According to clause 21 of "The Special Technology Zones Authority Bill, 2021", "Exemptions and Incentives for zone enterprises, the following shall be the incentives for the zone enterprises from the date of issuance of the license for ten years, namely:-
a. Exemption from all taxes under the Income Tax Ordinance, 2001 including on profits and gains, income tax, turnover tax, withholding tax, capital gains tax, income tax on dividend income, and withholding tax on the dividend;
b. Exemption from sales tax under the Sales Tax Act, 1990;
c. Exemption from Customs Duty under the Customs Act 1969 on the import in Pakistan from all Capital Goods including but not limited to materials, plant machinery, hardware, equipment and software, devices, instruments, accessories, attachments, building materials, materials, and any other equipment required to perform functions of the zone enterprises, whether or not manufactured locally, for use in zones;
d. Exemption from property tax;
e. Exemption on dividend income and capital gains of any venture capital fund (whether local or foreign) derived from investments in the zone enterprises;
f. permission for opening and maintaining of foreign currency accounts, availability of foreign exchange, full convertibility to foreign currency and repatriation, and free transfer of foreign currency to meet the requirements of investors, lenders, contractors, operators, consultants, insurers, re-insurers, vendors and advisors with any compensation amounts, loan repayments, equity and return on equity, profits, works, goods, and services following the foreign exchange regulations of the State Bank of Pakistan for zones."