Month: March 2020

ISLAMABAD: Economic Coordination Committee of (ECC) the Cabinet on Monday approved Rs75 billion for Federal Board of Revenue (FBR) for the repayment of tax refunds.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired a special meeting of the ECC, which approved Rs75 billion for FBR to enable them to payback the sales tax and income tax refunds, duty drawbacks and customs duties which is due for the last 10 years.

The amount shall help approximately 676,055 beneficiaries by improving their liquidity position.

ECC also approved the supplementary grant of Rs30 billion to Ministry of Commerce to payback duty drawbacks to textile exporters in the current financial year to improve their liquidity position when their businesses are experiencing a slowdown due to worldwide outbreak of corona epidemic.

The special ECC meeting was met to fulfill the necessary requirements for different relief measures already announced by the Prime Minister for the public due to the ongoing Corona Virus Pandemic.

ECC approved the fiscal stimulus package of Rs1.2 trillion with main components as follows:

ECC approved Supplementary Grant of Rs100 billion for the “Residual/Emergency Relief Fund” in terms of article 84(a) of the constitution of Islamic Republic of Pakistan for provision of funds for mitigating the affect of COVID-19.

The special Package for providing relief to the poor through cash assistance under the Ehsaas Program was also approved by the ECC.

The package shall provide cash grants to 12 million families under the regular “kafalat program” and Emergency Cash Assistance on the recommendation of the district administration.

The assistance will be provided for four months and besides the BISP beneficiaries it will be one time dispensation, the cash will be provided either in one installment of Rs12,000 through Kafalat partner banks i.e Bank Alfalah and Habib Bank Limited after biometric verification or it may be provided in two installments of Rs6000/- each.

The Poverty Alleviation Division was asked to present both options with feasibilities.

The partner banks may be asked to make arrangements through branchless banking networks to disburse cash. Rs 72.9 billion of additional funds through technical supplementary grant would be given to BISP under “Ehsaas Cash Assistance Package in Response to COVID-19” Pandemic.

After Ministry of Industries and Production presented a comprehensive proposals regarding the targeting parameters , implementation mechanism, cash assistance per family per month and financial phasing of the program, ECC approved Rs200 billion of cash assistance for the daily wagers working in the formal industrial sector and who had been laid off as a result of COVID-19 outbreak.

It was estimated that around three million workers will fall in this category and they will have to be paid a minimum wage of Rs.17500 per month.

The estimated cost of this provision for daily wagers comes around to Rs52.5 billion a month.

The provincial labour departments shall ensure the delivery of assistance to the laborers while the provision of funds shall be the responsibility of the federal government.

ECC directed that immediate consultation with the provincial labor departments(mentioned under the provincial rules of business) may be carried out for providing timely assistance to those who are in need.

ECC approved Rs50 billion for Utility Stores Corporation to provide essential food items to the vulnerable section of the society at subsidized rates.

USC has prepared an initial plan to deliver 9 essential food items @ Rs 3000 for a family of 2+4 people through Pakistan Post Foundation Logistics Division.

USC has further planned to procure essential items within 2-3 weeks. It was directed that USC may engage with BISP to obtain data for targeted assistance and again come back to the ECC for a detailed proposal for reaching out to the poor families for the effective use of this package before making any expenditure from this amount.

ECC also allowed to reduce different taxes and duties on import and supply of different food items for alleviating the adverse impact of COVID -19 on different sections of the society.

Rate of advance tax on the import of different pulses was reduced to 0 percent from 2 percent. individuals and associations of persons providing tea, spices, dry milk and salt to USC without a brand name will pay 1.5 percent withholding tax instead of 4.5 percent.

Individuals and AoP receiving payments from USC for supplying ghee, sugar, pulses, and wheat flour shall be charged 1.5 percent withholding tax instead of 4.5 percent earlier. ACD (additional customs duty) @ 2 percent on soya bean oil, canola oil, palm oil and sunflower oil (and on these four oil seeds) has also been exempted.

ECC was briefed SBP is working on payment of claims worth Rs49 billion out of which around 40 billion will be paid by June 2020.

ECC approved supplementary grant of Rs6 billion for Pakistan Railways to meet its expenses. Pakistan Railways has suspended its passenger train services around the country since 19-3-2020.

The approved amount shall be utilized for paying salaries to 70,000 employees, repairs, paying for utilities and performing disinfectant sprays on platforms and inside trains for proving safe journey to the passengers.

Currently Pakistan Railways is earning only 1/6th of its monthly income through coal freight and the rest is suspended.