Photo: Commissioner General Sam Koim of the Internal Revenue Commission
In a recent speech at the National Press Club event, Commissioner General Sam Koim of the Internal Revenue Commission (IRC) highlighted the importance of Special Economic Zones (SEZs) in stimulating economic growth. However, he cautioned against hastily establishing SEZs throughout the country, emphasizing the need for careful monitoring. Koim proposed a strategic approach, advocating for the creation of one or two successful SEZs as models before replicating the concept elsewhere.
Koim acknowledged the positive impact SEZs have had in various countries, while also recognizing instances where they have fallen short. He commended the government's proactive stance in promoting and encouraging SEZs, emphasizing their potential benefits for tax revenue and national development. Koim stressed the importance of precise implementation, noting several aspects that require careful consideration.
"SEZ is a good concept. It has worked well in many countries and also faced challenges in others," Mr. Koim said. "It's encouraging that the government is promoting and supporting it."
According to the IRC Commissioner General, simply offering tax holidays may not be sufficient to attract investors. He emphasized the need for a comprehensive approach, where investments in security, power infrastructure, transportation, and other related factors would complement the tax benefits. Koim stressed the necessity of incorporating diverse perspectives and strategies to optimize the effectiveness of SEZs.
"When it comes to the tax holiday itself, it's not the main attraction. There are other factors to consider. If investors receive a tax holiday but the same amount is spent on security, power, and other attractions, I don't think it will attract business," Koim explained. "A range of views need to be taken into account."
The government's commitment to facilitating investor attraction is commendable, and Koim emphasized the need for robust mechanisms to ensure the success of these initiatives. The IRC is actively collaborating with the SEZ committee, with one of Koim's commissioners serving on the SEZ Board. Their primary objective is to protect taxpayer funds while creating an environment conducive to attracting investments.
"The government is on the right track by promoting ways to attract investors. However, we need various mechanisms to make it work," Koim affirmed. "We are working closely with the SEZ committee, and one of my commissioners is on the SEZ Board. We will ensure the protection of taxpayer funds."
