Economic Coordination Committee (ECC) of the Cabinet has approved a proposal for the grant of exemption from tax/duties for import of construction material for infrastructure projects of National Highway Authority under the CPEC project.
This exemption would be applicable only to the construction of Sukkur-Multan section of Peshawar to Karachi Motorway project. Sukkur-Multan Motorway, the six-lane, 393km motorway is part of the eastern route of CPEC. It will be completed in 2019 at the cost of Rs294 billion.
Prime Minister Shahid Khaqan Abbasi chaired the meeting of ECC at Prime Minister House. ECC also permitted WAPDA to raise financing from banks against the sovereign guarantee of the government of Pakistan (GoP) for the purpose of clearance of arrears of net hydel profits of the government of Khyber Pakhtunkhwa and government of Punjab. The WAPDA would raise a loan of Rs70 billion from commercial banks to pay net hydel profit (NHP) along with arrears to KPK and Punjab. Punjab and KP are said to be unhappy on undue delay in clearance of their dues. Since WAPDA is running out of money, it has to raise loans backed by a GoP guarantee from commercial banks. The Finance Division assured to provide the requisite guarantee.
The ECC also approved a proposal for reduction of certain regulatory duties on certain items as proposed by the Federal Board of Revenue. FBR had moved a summary before the ECC for rationalising 10 percent regulatory (RD) imposed on 1250 KV gas generators. Textile industry complained that they are being used by them to reduce the cost of production of the textile products.
The government has also withdrawn RD on spare parts of the auto sector and tyres. The prices of vehicles tyres have surged from Rs.500 to Rs.5,000 after the imposition of RD. Representatives of Tyres Association stated that vehicles tyres do not fall under the category of luxury items and have become a necessity. ECC approved exemption from relending policy of Government of Pakistan for funds released to State Bank of Pakistan for implementation of Financial Inclusion and Infrastructure Project.
The ECC also approved a proposal of Ministry of National Food Security and Research to allow the governments of Punjab and Sindh to export 1.5 and 0.5 million tons of wheat including wheat products. The export of wheat and wheat products would be completed before the 30th June 2018.
Proposal for exemption from provision of section 113 of the Income Tax Ordinance 2001 for public sector universities was also approved by the ECC. The proposal of exemption from applicability of section 5A of the Income Tax Ordinance 2001 to companies with special agreement with the government of Pakistan was approved by ECC. ECC also approved a proposal for the procurement of 0.3 MMT of sugar from the surplus stock of the sugar mills, through tendering process and to export the same through international tendering process. The step would enable the mills to procure sugarcane from the growers at the prescribed rate and to ensure timely payments to the farmers.
