INTRODUCTION

NWFP has large potential for hydroelectric power generation and distribution with its many rivers and streams. Possible sites for developments have been identified and the opportunities are available. The province is also rich in mineral resources. These include Emerald, Barites, China Clay, Chromite, Clay Shale, Coal, Dolomite, Feldspar, Gypsum, Limestone, Marble, Magnasite, Phosphate, Silica Sand, Soap Stone, and Slate Stone.

Tarbela dam

A number of industries have been identified and initiated, and are ready for private sector investment. The government of the province is keen to attract business community into the province and offers various incentives like Income Tax Exemption, Duty and Sales Tax Exemption, Rebate in Electricity Tariff, and Public-Private Joint Ventures.

SARHAD DEVELOPMENT AUTHORITY

The Sarhad Development Authority (SDA) came into existence through the Act of 1972 by the Provincial Assembly, NWFP with its Head Office in Peshawar. The main objectives of this organization are the following:

• Planning, promoting, organizing and implementing programmes for the establishment of industries and commercial ventures.
• The exploration, development and exploitation of minerals.
• Tendering advice on the technical, operational and commercial feasibilities of any programme of schemes specified by the government.

The Chief Executive of this Authority is its Chairman, who is appointed by the government. He is assisted by a working Board of Directors who are looking after functions like planning and implementation of projects, their operation, financial and administrative aspects, development of minerals and downstream industries.

The SDA's Board is autonomous and business decisions are based on financial and economic considerations balanced by social responsibilities.

INCENTIVES FOR INDUSTRIAL SECTORS IN THE NWFP

General

• Income tax holiday for 8 years for all new industries.
• Exemption of Custom Duty and Sales Tax on imported machinery to the specified extent.
• Exemption of industrial products from payment of Sales Tax for a period of 5 years for such units, which have opened letters of credit before the 30^th of June 1994, for import of machinery or have firmed up financial arrangement with the banks or financial institutions before the said date, for new industries to be setup to 30^th June 1996.
• 25% rebate in electricity tariff for rural industries only.
• Exemption from Octoroon and Local Taxes for 5 years, after commencement of production.

Specific Incentives for rural areas of NWFP

• Income tax holiday for 8 years
• Total exemption of imported machinery for rural industries from the payment of Custom Duty, Sales Tax and Import surcharge.
• Transmission of technology acquired by the government institutions from abroad to rural entrepreneurs at nominal rates.
• Conducive environment for foreign investment in free and fair atmosphere.
• Free transaction of principal amount and profits without the prior permission of the government of foreign investors.
• Debt-equity ratio would be 70:30 instead of 60:40 for industrial units based on imported machinery.
• Debt-equity ratio would be 80:20 for industries based on local machinery.
• Self-power generation by the entrepreneurs would be encouraged and in case of excess electricity generation, WAPDA would purchase the excess power.
• 50% rebate on railway freight for Export Processing Zone, being established near Nowshera.

Specific incentives in Gadoon Amazai Industrial Estate

• Income Tax holiday for 8 years
• Exemption from Custom Duty on import of machinery to the specified extent.
• 25% concession in leviable duties on imported raw materials for existing industries, subject to negative list of industries.
• 50% concession on electricity tariff subject to negative list of industries
• Exemption of industrial products from payment of sales tax for a period of 5 years for such units, which have opened letters of credit before 30^th June, 1994, for import of machinery or have firmed up financial institutions before the said date for new industries to be setup up to 30^th June, 1996.