Industries in SEZ to get number of incentives
KATHMANDU, Aug 30: The full house of the parliament on Monday approved Special Economic Zone (SEZ) Bill, paving the way for private sector to establish, operate and manage industries in SEZs.
The SEZ Bill, which will come into effect after it is authenticated by the President, guides the government and the private sector to allocate a separate space to industries for smooth industrial operation.
Once the new law comes into effect, laborers and trade unions will be barred from organizing protests and strikes in the SEZ. “Regardless of the provisions in existing laws, employees of industries in SEZ are not allowed to hold activities like strike and protest that adversely affect the industry and its production,” reads Clause 43 of the bill.
The government had started preparing draft of SEZ Bill 13 years ago. It was tabled in the parliament for approval by the Industry, Commerce and Consumer Welfare Protection Committee of the parliament on July 5.
Chandika Prasad Bhatta, the executive director of SEZ Development Committee, told Republica that the passage of the bill was a landmark achievement toward development of industries and promoting exports. He said that the SEZ Bill ensures economic benefits and incentives to industries in SEZ.
"The bill provisions one-door policy for establishment, operation and closure of the industries in SEZ. It also envisages providing many economic incentives for such industries," said Bhatta.
The Bill states industries in SEZ will be treated differently in tax, fees and any other charges on production. Industries can enjoy 50, 40 and 25 percent discounts on land leasing amount in first, second and third year of its establishment, respectively. Similarly, the bill states that the incentives cannot be curtailed regardless of what is written in other laws.
Infrastructure project developers and industries setting up industrial units in SEZ will enjoy 100 percent income tax waiver for the first five years.
Similarly, the industries using at least 60 percent domestic raw materials will enjoy 50 percent income tax waiver for next ten years. Other industries can enjoy income tax waiver for first five years. However, industries opened in SEZ in mountainous or specified hilly districts will be offered 50 percent income tax waiver for ten years in addition to 100 percent income tax in the first decade of operation.
Private sector leaders have hailed the passage of the bill in the parliament. "We are hopeful that the new law will help to revive and reinvigorate industries and increase exports," said Hari Bhakta Sharma, president of Confederation of Nepalese Industries. "However, the parliament should also expedite the passage of other economic bills which are also closely linked with the SEZ Bill," he added.
The government recently inaugurated the Bhairahawa SEZ. It has announce plan to open 13 SEZs in different parts of the country. The bill states that at least one SEZ will be established in each province.