ISLAMABAD – Prime Minister Imran Khan on Saturday said that the government’s new Blue Economy policy will revitalize Pakistan’s shipping sector, save valuable foreign exchange and create more employment opportunities for seafarers.
In a tweet, the Prime Minister congratulated the Ministry of Maritime Affairs for finalizing a new and dynamic Blue Economy policy.
“We will ensure that Pakistan fulfils its enormous maritime potential,” Imran Khan asserted.
Just weeks ago, Federal Minister for Maritime Affairs, Syed Ali Haider Zaidi, had announced the country’s new shipping policy under which incentives have been provided to private shipping companies.
While addressing a news conference along with Prime Minister’s Advisor on Commerce, Abdul Razzak Dawood, in Islamabad, the minister had said the government wanted to involve the private sector in the shipping business.
The new policy offers various incentives, including exemption from federal tax on the Pakistan resident ship-owning companies for 10 years, while the ships sailing under the Pakistani flag would be given preference in berthing at the country’s ports.
According to the new policy, imports by the shipping companies of small and large ships in Pakistan will be exempted from customs duty until 2030. The incomes from these ships until that period would also be exempted from sales tax and income tax.
Zaidi told the press conference that new Pakistan resident ship-owning companies would pay tax of $0.75 per gross register tonnage (GRT) for the first five years of the operations of each individual vessel, subject to the cut off period till 2030.
After five years, the minister said, Pakistan resident ship owning companies would pay $1 per GRT annually on the income from vessels’ operation. He added: “No federal tax will be levied to the detriment of Pakistan resident ship-owning companies during the exemption period.”
The minister said that vessels, under the Pakistani flag, would be provided priority berthing at all Pakistani ports, while no preference would be given to the Pakistan National Shipping Corporation (PNSC) in private sector cargo.
He said that the shipping companies could now take advantage of the liberal fiscal concessions and low mark-up rates offered by the State Bank of Pakistan (SBP) under its Long-Term Finance Facility (LTFF) to acquire ships, carrying the Pakistan flag.
“In the light of the shipping industry significance in overall economic development and foreign exchange savings, the shipping industry has been allowed to avail Long-Term Finance Facility (LTFF)/Islamic Long-Term Finance Facility (ILTFF),” the minister said.
Defining the Pakistan resident ship-owning company, the minister told a questioner that it would be a company which was registered with the Securities and Exchange Commission of Pakistan (SECP) and had its own seaworthy vessels registered under the Pakistani flag.
According to the minister, both domestic and foreign investors could avail these facilities. The SBP would provide long-term financing facility for the purchase of cargo ships, he said. “This policy will also benefit the fishermen,” he added.
Currently, Pakistan’s national flag carrier Pakistan National Shipping Corp (PNSC) is operating a sizeable fleet of ships largely tankers, and handling small percentage of country’s seaborne trade. Major chunk of Pakistan’s imports and exports are being handled by the foreign flag carriers.