The Khyber Pakhtunkhwa government has planned to set up at least 10 economic zones across the province in the next decade under the Industrial Policy, 2020.The provincial cabinet had approved the policy last month.
PLANNED ECONOMIC ZONES
According to the policy, the proposed zones include
Rashkai Special Economic Zone Nowshera Economic Zone Extension . Government will set up more economic zones in Jalozai, Nowshera, Chitral, Mohmand, Ghazi, Darband, Swat, Buner and Shakas areas. Also, they have planned establishment of two special economic zones under the public-private partnership in the next five years.
INDUSTRIAL POLICY 2020
The document shows that the policy will promote construction, automobile, pharmaceutical, electronics, apparel, transshipment, IT and food and labor intensive industries in the province.
It also includes a snapshot of the province’s existing small and medium enterprise and cottage industry. In addition, it proposes the establishment of 19 small industrial estates across the province in the next decade.
The policy proposes that the province’s human resources must be equipped with modern and technical skills. Thus, including artificial intelligence, and those required for fourth industrial revolution.
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It also calls for leveraging the province’s natural resources like hydel, mines and minerals, oil and gas, food and beverage processing, and cottage industry to make the local industrial sector competitive.
FISCAL INCENTIVE PACKAGE
The fiscal incentive package proposed for investors to set up industrial units in the province. It provides for the exemption from provincial electricity duty for new and expansion projects. Initial installation and balancing, modernization and replacement facility for one-time duty, tax-free import of capital goods. Both plant and machinery, exemption of tax on transfer of sick unit property and repatriation of profit for foreign investors subject to the existing laws and commitments.
FINANCIAL INCENTIVE PACKAGE
Similarly, the financial incentive package provides for 25% concessions on land lease charges. In case of government land, the acquisition of land will take place over five years with 25 per cent down payment.
The policy notes that industrial cooperation under the CPEC provides KP with opportunities to jumpstart industrialization.
The policy says through the industrial policy, the province can leverage its natural endowments and low-cost human resource to attract Chinese industries..
The document notes that the policy will help investors launch joint ventures with local ones. Similarly, put money to utilize indigenous natural resources, bring in new technology, invest in labor intensive. Moreover, add value to the local products.
It adds that the policy stresses on the importance of developing the critical infrastructure facilities through the public-private partnership. Hence, to help the government optimally utilize its resources while extending full facilitation to the prospective investors.
The policy also proposes incentives in the merged tribal districts. Also, the Government will ask State Bank of Pakistan to direct both public and private sector commercial banks to extend Sharia compliant commercial lending to these districts.
According to the policy, State Bank will give land at 15% discounted price in the specific merged areas earmarked for industrial zones. However, Government will supple electricity through independent feeders. Also, they will ensure an easy access to local markets in respect of the goods processed and manufactured in the merged tribal districts.
The policy reveals that the exemption of KP sales tax on services will continue in tribal districts. Hence, until June 30, 2023.
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