2010年-世界发展银行全球_Improving_Export_Incentives_and_the_Free_Zone_System_in_Syria_22页_245kb

Summary of "IMPROVING EXPORT INCENTIVES AND THE FREE ZONE SYSTEM IN SYRIA"

Core Content

This document analyzes the current export incentive system in Syria and proposes reforms to enhance its international competitiveness. It highlights the need for structural changes in Syria's trade regime, which currently imposes high import duties and taxes, poor infrastructure, and cumbersome trade procedures, creating an anti-export bias that hampers export growth and discourages both foreign and domestic investment. The paper suggests modernizing the export incentive framework by introducing duty and tax relief schemes, manufacturing under bond, export processing zones (EPZs), and free zones (FZs), while reorienting the existing free zones to better serve the Syrian economy.

Main Views

• Export Incentives are Critical: Effective export incentives are essential for reducing production costs, improving competitiveness, and attracting investment in export-oriented industries.
• Anti-Export Bias Exists: Syria's import regime, with an average nominal protection rate of 30%, significantly increases export costs and reduces competitiveness in international markets.
• Competitiveness Indicators are Poor: Syria ranks poorly in global competitiveness indices, particularly in efficiency-related indicators such as labor market efficiency, financial market sophistication, and technological readiness.
• Free Zones are Underutilized: Syria has 8 free zones, but they are primarily engaged in commercial activities rather than manufacturing, with limited contribution to exports and employment.
• Best Practices Can Be Adopted: The paper draws on international best practices to recommend the implementation of duty and tax drawback/exemption, manufacturing under bond, and EPZs to improve the export sector.

Key Information

1. Current Export Incentives in Syria

• Duty and Tax Drawback: Limited to a specific list of imports; no exemption exists.
• Manufacturing under Bond: Not currently implemented in the Customs Law.
• Export Processing Zones (EPZs): Not included in the Customs Law.
• Free Zones (FZs): Exist but are focused on commercial activities, not manufacturing. They do not pay taxes on export activities, leading to significant revenue losses.

2. Weaknesses in the Current System

• High import duties and taxes increase production costs.
• Poor infrastructure and trade facilitation reduce efficiency.
• Administrative barriers make doing business difficult.
• Free zones are not effectively integrated with the local economy and lack proper management.

3. Proposed Reforms

• Duty and Tax Drawback/Exemption: Amend the Customs Law to extend these benefits to all export-related imports and include exemption options for regular exporters.
• Manufacturing under Bond: Introduce this scheme in the Customs Law, with proper licensing, security, and record-keeping.
• Export Processing Zones (EPZs): Include the concept of EPZs in the Customs Law and define operational rules. Prioritize single-factory EPZs and convert parts of Industrial Cities into EPZs.
• Free Zones: Restructure free zone legislation to reduce domestic tax exemptions, improve infrastructure, allow purchases from local markets, and transfer management to the private sector.
• Consolidation of Free Zones: Explore the possibility of merging free zones to reduce operating costs and improve efficiency.

4. Implementation Framework

• Establish an institutional and administrative framework to support the implementation of the proposed incentive schemes.
• Provide technical assistance from the donor community to build capacity and improve procedures.
• Prioritize the implementation of the drawback regime first, followed by single-factory EPZs, especially in Industrial Cities, due to their administrative feasibility.

5. Success Factors for EPZs

• Clear legal, institutional, and administrative frameworks.
• Integration with the local economy through backward linkages.
• Development as part of a broader export promotion and private sector strategy.
• Reliance on good infrastructure and streamlined procedures rather than excessive fiscal incentives.
• Effective management, especially through public-private partnerships.
• Integration of manufacturing and commercial activities to leverage economic clusters.

Conclusion

To improve Syria's export competitiveness and diversify its economy away from oil, the country must reform its trade regime and implement an effective export incentive system. This includes introducing duty and tax relief, manufacturing under bond, and EPZs, while reorienting free zones towards manufacturing and enhancing their integration with the local economy. The paper emphasizes the importance of institutional capacity, administrative efficiency, and a supportive policy environment in ensuring the success of these reforms.