In a bid to attract more foreign investors and indigenous technology companies, Prime Minister Imran Khan launched the Special Technology Zones Authority, with plans to implement comprehensive duty and tax incentives for a period of 10 years for both local and foreign companies. According to the new authority’s chairman, Amer Ahmed Hashmi, these zones will foster skill development, job creation, technology transfer and new economic value generation.
The regulatory law formulated as the basis of this authority, the Special Technology Zone Authority Ordinance 2020, goes through several leaps to provide more incentives to investors and developers. One concession made by the government is to exempt companies from explaining the source of funds to be invested, effectively providing immunity from many rigorous accountability-based regulations that apply to other businesses. The government may be realising the effect that such regulations have on the ease of doing business, especially the impact criminal liabilities can have on the fickle technology sector. Other than that, the government has allowed several tax exemptions to investors, from declaring income and assets for 10 years and from all customs duties and taxes for a period of ten years from the date of issuance of licence by the authority on capital goods. These are big exemptions to make, considering the government’s focus on widening tax brackets and the deficit, but these are necessary steps to take to set up a still largely underdeveloped tech sector in Pakistan.
This initial help by the government was required, especially after the recent struggles the state has had with foreign technology companies over regulation. There is still a huge lack of information on investment and potential future prospects and an authority was needed to be established to sort out the nitty-gritty and basically get the ball going. Once the red-tape has been ironed out, it is hoped the concessions and a helpful, skilled authority will aid in expanding the tech sector.