KATHMANDU, (Xinhua) – Nepalese parliament has passed the bill on Special Economic Zone (SEZ) to attract more foreign investment in Himalayan country.
The bill, endorsed on Monday, has made provision of full income tax exemption for five years for the industries operating inside the SEZ. The industries that use at least 60 percent domestic raw materials will get 50 percent tax exemption for additional 10 years while others will get additional five-year tax exemption.
The bill will take a form of law after President Bidya Devi Bhandari puts stamp on it.
The tax on dividends distributed by the company inside SEZ will be exempted for five years, according to the bill.
Value added tax (VAT) of the companies in the SEZ will be fully exempted if goods are exported. They will get discount in customs duty for industrial raw materials imports, according to the bill.
The bill has also banned workers from holding all forms of protests that could affect the production of the factories in the zone.
Strikes by different trade unions, caused by the interest of certain political parties, have been blamed for a major constraint for attracting investment in the Himalayan country.
The government officials and industrialists said that endorsement of the bill by the parliament was an important step towards attracting domestic and foreign investment in the country.
Chandika Prasad Bhatta, executive director of SEZ Development Committee, said that the endorsement of the bill would help attract foreign investment.
Pashupati Murarka, President of Federation of Nepalese Chambers of Commerce and Industry, said that provision of ensuring 24-hour electricity, exemption of various types of taxes for prolonged period and prohibition imposed on strike would definitely attract investors to the SEZ.