SEZs sit idle as business leaders demand overhaul

The Pakistan Industrial and Traders Association Front (PIAF) has called for broad reforms to the Special Economic Zones (SEZs) and Export Processing Zones (EPZs), according to The Express Tribune. The group warned that, without a steady and predictable policy environment, Pakistan could forfeit billions of dollars of prospective investment from abroad and at home. The appeal comes as the government holds talks with international lenders over its tax regime, including incentives that exporters regard as important.

PIAF chairman Syed Mahmood Ghaznavi said years of underperformance mean patchwork fixes will not be enough. He called for a lasting commitment from the state rather than temporary incentive packages that are withdrawn after a couple of years. Industry leaders also want tax relief tied to measurable results, such as new investment, export volumes, employment and local value addition, instead of blanket exemptions. They believe this approach would keep the incentive regime fiscally sustainable and more appealing to lenders such as the IMF.

The paper notes Pakistan's exports have stayed near $30 billion a year, while India's SEZs alone earn over $185 billion this fiscal year. Business owners inside the zones cite overlapping approvals, unreliable power and gas, and customs checks that can take weeks. PIAF proposes a single authority to issue permits, utility connections and clearances, which it says would remove a major deterrent to new units.