It has been reported that UK government is planning to build 10 free ports across the country after Brexit deal. These ports will allow firms to import and export goods without any custom rules and tax. In 2012, UK already had these kinds of zones and it is stated by PM Boris Johnson that he believes these zones could create employment in areas that are left behind.
Liz Truss, International Trade Secretary said that move of making free ports would create thousands of jobs.
Tory leadership candidate, Mr. Johnson has supported the plan of creating free ports and he had also suggested that there should be six of them around UK. However, Labor has stated that there are no new investments involved for this move and this could possibly attract tax dodgers as well as money launderers.
Seaports and airports will be able to apply for free port status, to be set up after the UK is due to leave the EU on 31 October.
The airports and seaports of UK will be eligible to apply for the free ports which are expected to be set up as UK leaves the EU, most probably on 31 October. Although some are arguing that UK can benefit more if it is allowed to diverge from EU laws and policies after Brexit but the fact is that free port zones are allowed as per the laws of EU.
Free ports are also known as free trade zones and these designated areas differ from normal areas of the country. These zones are from the tariff and tax rules that are implied all over the country. Firms can not only import goods but free trade zones also allow them to re-export the goods without the hassles of tariffs, paperwork, taxes, etc. Although, a firm operating in these free zones has to pay lower taxes like VAT, lower employment tax, etc. but critics argue on the point that higher import tariffs have to be paid at some point.