KATHMANDU, Jan 25: Industrialists are upbeat with the government’s preparation to make an amendment to Special Economic Zone (SEZ) Act to encourage investors for putting their money to set up export-oriented industries in SEZs.
Speaking at a round table entitled ‘Problems faced by industries in Bhairahawa SEZ’, organized jointly by Economic Policy Incubator and Society of Economic Journalists of Nepal in Kathmandu on Thursday, they said that the government’s decision to reduce the mandatory export provision for industries in SEZ to 60 percent from existing 75 percent would encourage private sector toward investing in SEZ.
The government has already tabled the amendment bill in parliament.
“The new SEZ Bill has addressed some of the key issues raised by the investors. However, it is crucial that government implements the law properly through enhanced cooperation among its agencies,” Shankar Sharma, former vice-chairperson of the National Planning Commission (NPC), said.
Along with reducing the mandatory export provision, the new SEZ Bill also assures 100 percent income tax waiver for such industries for first five years and 50 percent income tax waiver thereafter.
Similarly, the bill has also reduced the rental fee for industries to Rs 20 per square meter per month from Rs 150 per square meter month. Further, the new bill has also reduced the minimum investment ceiling for industries in SEZ to Rs 20 million from Rs 50 million.
“The SEZ Act is being amended with a view to boost the morale of investors inside SEZ. If necessary, we can be further flexible in export provision for such industries in the future,” Chandika Bhatta, executive director of SEZ Authority Nepal, said, adding that the new SEZ Bill also incorporates a provision whereby industries inside SEZ get all assured tax waiver facilities under the recommendation of SEZ Authority itself.
Hara Raj Neupane, deputy managing director of the Nepal Electricity Authority (NEA), assured that the authority was serious about providing necessary power supply to the industrial sector, including the Bhairahawa SEZ.
Former Commerce Secretary Purshottam Ojha said that the government should focus on implementing the one stop service center to avoid unnecessary hassles for industries.