The Federal Government has removed Special Economic Zones (SEZs) from minimum turnover tax.
The Special Economic Zones (SEZ) Act, 2012, had already exempted SEZs from all taxes, but some Chinese and other investors had complained that they are still being charged turnover taxes, Business Recorder reported on Monday.
During the 6th meeting of the Board of Approvals, held in October last year under the chair of PM Imran Khan, it was highlighted that even though SEZ Act provides “Exemption from all taxes on income” to Zone Developer and Zone Enterprises under sections 36 & 37 of the said Act, the SEZ enterprises were still being subjected up to 1.5 percent turnover tax.
During the meeting, it was informed that Section 126E of the Income Tax Ordinance 2001 also offers the same exemptions. However, at the same time, Section 113(3)(a) of the Income Tax Ordinance 2001 necessitates turnover taxes for the economic zones under concern.