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Tag: ECC

  • ECC approves withholding tax exemption on remittances transfer to bank accounts

    ECC approves withholding tax exemption on remittances transfer to bank accounts

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved exemption from withholding tax on transfer of remittances into bank accounts.

    The ECC approved at the meeting on Wednesday chaired by Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.

    The ECC approved that the amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    The ECC approved a host of measures to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.

    Under the decision, following measures for the enhancement of home remittances through banking channels were approved:

    i. The rebate of reimbursement of T.T. Charges transactions between USD 100 and USD 200 will be increased from SAR- 10/- to SAR-20/-.

    ii. Continuation of the New Scheme of incentives launched in 2018-19 for banks and exchange companies during the current calendar year from January 2020. As per Scheme financial institutions would be incentivized Rs. 0.50 per 1 USD on 5 percent growth, Rs. 0.75 per 1USD on 10 percent growth and Rs. 1/- per 1USD on 15 percent growth.

    iii. The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    iv. A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

    ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above mentioned initiatives.

    Taking up other agenda items, the ECC approved a proposal by the Ministry of Federal Education & Professional Training for a technical supplementary grant of Rs 5 billion in favour of the Higher Education Commission (HEC) for the current Financial Year 2019-20 with instruction for a judicious and need-based distribution of funds among the universities.

    The ECC also approved a proposal by the National Security Division for a technical supplementary grant amounting to Rs 15 million for the Strategic Policy Planning Cell (SPPC) created in the National Security Division with the approval of the Prime Minister to act as an intellectual hub for evidence-based policy input on key national security issues.

    On a proposal by the Ministry of Defence, the ECC okayed a proposal for a technical supplementary grant amounting to Rs 34.528 million for Internal Security Duty Allowance to the Pakistan Air Force.

    On a proposal by the Petroleum Division, the ECC approved allocation of gas to SSGC and Provisional Tight Gas Incentive for Rehman-4 Well in Kirthar Block subject to the finalization and approval of requisite third-party certifications for Tight Gas for the same well.

    The ECC also discussed a proposal regarding quarterly adjustments of the K-Eectric Limited for the period from July 2016 to March 2019 and in the light of input and discussion by the members, set up a committee including Minister for Power Omar Ayub Khan, Minister for Economic Affairs Muhammad Hammad Azhar, Deputy Chairman Planning Commission, Secretary Finance and a representative from the K-Electric to examine the issue in detail and recommend to ECC within a week a solution and roadmap for resolving the issue.

    The ECC also deliberated upon a proposal by the Ministry of Energy to further extend till June 2020 the grant of subsidy to agricultural tubewell consumers in Balochistan.

    Earlier, the ECC was briefed that nearly 30,000 agri consumers in Balochistan had been given subsidy since 01.01.2015 with 40 percent of the burden of subsidy born by the Government of Pakistan and the remaining 60% picked up the Balochistan government.

    However, the recovery of dues from the farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful.

    The ECC discussed the issue in detail and set up a Committee, including the Minister for Power, to discuss the issue with the Government of Balochistan to ensure a credible solution to the problems impeding a judicious execution of the scheme for which the federal government alone was contributing Rs 9 billion annually, and also allowed the extension of subsidy until a solution to the issue was found by the Committee and put in place.

    On a proposal by the Ministry of Industries and Production for revival of M/s Tuwairqi Steel Mills Limited (TSML) – A Direct Reduced Iron (DRI) Unit, the ECC discussed the issue and asked the Ministry of Industries and Production to resubmit the proposal in the light of recent and ongoing development on different issues among stakeholders on the proposal.

  • ECC allows import of controlled chemicals through commercial importers

    ECC allows import of controlled chemicals through commercial importers

    The Economic Coordination Committee (ECC) of the Cabinet, under the chairmanship of Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh, has permitted the import of controlled chemicals through commercial importers. This decision, made on Wednesday, is aimed at easing the availability of essential chemicals for various industrial applications.

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  • ECC bans sugar export to control prices

    ECC bans sugar export to control prices

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday banned the export of sugar to maintain the prices in domestic market.

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  • ECC approves Rs700 million for Postal Life Insurance

    ECC approves Rs700 million for Postal Life Insurance

    ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet on Tuesday approved an amount of Rs700 million as initial paid up capital for Postal Life Insurance.

    A statement said that In order to register Postal Life Insurance as Public Limited Company, ECC approved an amount of Rs 700 million as initial paid up capital.

    The amount shall be allocated by the Finance Division and transferred to the proposed Postal Life Insurance Company.

    After the approval Postal Life Insurance shall fall under the regulatory frame work of the Securities and Exchange Commission of Pakistan.

    Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired the meeting of Economic Coordination Committee (ECC) of the Cabinet here at the Cabinet Division.

    ECC also approved the Creation of Digital Media Wing in the Ministry of Information and Broadcasting. The purpose of the Wing shall be to effectively counter the fake/libelous news and highlight the development agenda of the government.

    The ECC directed the MoI&B to move ahead for the creation of the wing by using its already available resources.

    ECC also approved the amendment in SRO 192(1)/ 2019 dated 11-02-2019 extending exemption from regulatory duty to export oriented units.

    ECC considered and approved the grant of amount Rs 153.25million from the budget of the Ministry of Finance, as technical supplementary grant for the Ministry of Interior, to be given through the Office of the Deputy Commissioner of Islamabad, for compensation to the victims of suicidal attack at District courts F-8 Islamabad on 03-3-2014.

    Finance Division supported the proposal in compliance with the orders of the Honorable Supreme Court of Pakistan.

    ECC gave approval to the transfer of funds amounting to Rs 31.5 million in equivalent foreign exchange from the Ministry of Interior to the Ministry of Defence as Technical Supplementary Grant for the logistic support for the maintenance of Cessna aircrafts.

    ECC was attended by Federal Ministers for National Food Security and Research, Railways, Energy, Privatization and other senior officials of the different Ministries.

  • ECC approves waiver of all port charges against Karkey rental power

    ECC approves waiver of all port charges against Karkey rental power

    ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Wednesday approved waiver of all port charges against Karkey rental power.

    Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting at the Cabinet Division.

    The ECC considered and approved waiving off all port dues/ charges amounting to Rs 194,95 million on January 31, 2020 or till the vessels leave the port accruing against Karkey.

    The said waiver was required as a consequence of the settlement agreement reached between the Government of Pakistan and Karkey.

    On the summary moved by the Ministry of Industries and Production for the payment of outstanding liabilities of Pakistan Steel Mills against Sui-Southern Gas Company for the non- payment of Gas bills, ECC approved the release of Rs.350 million for the partial settlement of the SSGC liability.

    Establishment of Trust Fund to implement risk sharing facility under 3rd Tranche of US$10 million of credit line of US$140 million obtained from World Bank for Pakistan Mortgage Refinance Company Limited (PMRCL) was also approved.

    The purpose of the Trust will be to leverage the Trust Funds by issuing guarantees in favor of the mortgagors to cover possible losses from eligible mortgage loans.

    Finance Division also sought approval for the demand of Rs 80 million as Technical supplementary grant in the budget of the Finance Division for the Financial Year 2019-20 for providing assistance for families of the government employees who expired during service and provision of Adhoc relief allowance 2019.

    ECC also approved the proposal sent by the Ministry of Finance for the issuance of direction of the Federal Government to the State Bank of Pakistan under sub-section 6(A) of the section 17 of the SBP Act 1956 to sell its shares in House Building Finance Company Limited (HBFCL).

    ECC approved the grant of Technical Supplementary Grant amounting to Rs.100 million to National Information Technology Board (NITB) under the Ministry of IT & Telecommunication for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for the implementation of the E-governance program.

  • ECC allows import of 300,000 tons wheat

    ECC allows import of 300,000 tons wheat

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday allowed 300,000 tons of wheat to ensure sufficient supply of the commodity and reducing prices in the domestic market.

    A meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh on Monday allowed import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement.

    Under the decision, the wheat would be imported by the private sector by withdrawing regulatory duty to the extent of the approved quantity.

    The ECC further decided that the wheat to be imported under the ECC decision would be allowed in the country until March 31, 2020 to ensure that the local wheat to be available from the start of April was picked up at the right price from the market.

    The ECC also issued instruction for the immediate release of stocks held by the PASSCO and the provincial departments.

    Besides the import of wheat, the ECC approved a proposal by the Ministry of Industries and Production to reduce the GIDC on gas consumed by the fertilizer manufacturers from Rs 405 to Rs 5 per bag so that this benefit could be passed on to the farmers.

    ECC also allowed the raising of Rs 200 billion on the request of Ministry of Energy (Power Division) from the Islamic Banks as fresh facility through Power Holding Limited by way of issuance of Pakistan Energy Sukuk-II against assets of the DISCOs/GENCOs as collateral through open competitive bidding to procure financing in a fair and transparent manner.

    The amount will be utilized for the purpose of the funding the repayment liabilities of the DISCOs.

    ECC approved the proposed mechanism by the Ministry of Finance for the grant of Sovereign guarantees. All requests for government guarantees are to be accompanied by request for guarantee by the governing body of PSE’s.

    Further

    • Every request must be reviewed and endorsed by the concerned Administrative Ministry/Department of the relevant entity.

    • Audited Financial statements of previous year prior to issuance of guarantee is mandatory for evaluation of guarantee request

    • Business plan including an explanation of the business model and financial projections for at least 5 years;

    • A note explaining the following;

    1. Whether its need for guarantee is short term or long term.

    2. Business model followed by the entity since inception or over the last 5 years, whichever is less

    3. Financial as well as non-financial performance of the entity since its inception or over the last five years, whichever is less

    4. Request, along with justification, for the type and amount of guarantee needed by the entity and the timelines over which it is required The Finance Division shall evaluate the request internally and finalize its recommendations with the approval of the Finance Secretary.

    ECC also approved the report on proposed exemption of 5% sales tax on cotton seed cake.

    It was briefed to the ECC that in case the exemption of sales tax on Cotton Seed Cake cannot be introduced during CFY 2019-2020, the same can be considered for inclusion in the Finance Bill of 2020-2021.

    The approval of Technical Supplementary Grant of Rs. 96.652 million of National Book Foundation in favor of Ministry of Federal Education and Professional Training was also granted by ECC.

    Technical Supplementary Grant amounting to Rs 15 million for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for implementation of E-Governance program was also approved.

    ECC granted approval to the request of the Ministry of Interior for the Technical Supplementary Grant amounting to Rs458 million for payment of subsistence allowance to Personnel of Civil Armed Forces deployed in UN Peacekeeping Missions.

  • ECC constitutes price negotiation committee for TAPI gas pipeline project

    ECC constitutes price negotiation committee for TAPI gas pipeline project

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the constitution of Price Negotiation Committee (PNC) for TAPI(Turkmenistan-Afghanistan-Pakistan-India) Gas pipeline project.

    Adviser to the Prime Minister on Finance, Dr. Abdul Hafeez Shaikh chaired the meeting of the Cabinet here at the Cabinet Division.

    The PNC shall negotiate the price with Turkmen gas. The Committee shall consist of the following members; Secretary, Ministry of Energy (Petroleum Division) as chairman. Secretary Finance or his nominee, Joint Secretary, Ministry of Energy (Power Division), Director General (Gas)/ Director (Gas) and Managing Director, SSGCL as members.

    The ECC approved the Technical Supplementary Grant of Rs 1.00 billion under demand No.04-Cabinet Division for establishment of Pakistan Tourism Development Endowment Fund under Public account.

    The Chair directed Pakistan Tourism Development Corporation to come up with their tourism development and soft image promotion plan in the next meeting.

    The ECC also granted approval of allocation of Gas from PGNiG’s RIZQ Gas Field to M/S SSGCL. It was briefed to the ECC that currently 2 wells namely Rizq-1 and Rizq -2 are producing 16 MMFCD gas from Rizq gas field, which are allocated to M/s SSGCL, whereas Rizq -3 which is under drilling, is expected to add another 9 to 10 MMCFD gas to the existing production. Upon completion of this well, the cumulative gas production from this gas field is expected to raise upto 25 MMCFD. The price of the gas shall be according to the applicable Petroleum Policy.

    On the Demand moved by the Ministry of Industries and Production for Rs 3.02 billion for the payment of outstanding dues of SSGC Private Limited by Pakistan Steel Mills on account of gas bills, the ECC directed to constitute a three-member Committee under the Chairmanship of Secretary Finance to find out a feasible solution for the issue so that the already allocated budget may not be exceeded and the liabilities of both SSGC and PSM are duly settled.

    ECC directed Ministry of Finance to explore the possibilities for improving the liquidity position of Pakistan State Oil as exchange losses of around Rs 28 billion have incurred on FE-25 loans by PSO.

    The loans were acquired under the instructions of Ministry of Finance for financing of import operations of PSO.

    Finance Ministry assured the ECC of utilization of possible all funding options in the ongoing financial year and any deficiency in the funds shall be entertained in the upcoming budget.

    ECC granted extension of Government of Pakistan guarantee against credit facility of National Bank of Pakistan amounting to Rs5 billion in favor of Utility Stores Corporation of Pakistan.

    On the request of the Ministry of Water Resources ECC granted approval to WAPDA to raise loan for the settlement of the Financial Facility amounting to Rs17.500 billion with one-year tenure and GoP guarantee.

    Clearance under Prudential Regulations R-4(clause 1a and 2) from the State Bank of Pakistan to disburse the facility initially against a letter of comfort was also granted.

  • ECC approves increase in wheat support price

    ECC approves increase in wheat support price

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the minimum support price of wheat to Rs1365 per 40 kilograms from Rs1350.

    The ECC, which was chaired by Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance and Revenue, on Thursday approved the minimum support price of wheat from the previously announced Rs 1350 per 40 kg to Rs 1365 per 40 kg in view of representations from various farmers and growers’ associations as well as the Federal Cabinet and the National Assembly Special Committee on Agricultural Products which had proposed a reconsideration of the minimum support price in order to compensate the farmers in areas where the cost of wheat production had increased to Rs 1349.57 per 40 kg.

    Earlier, the Ministry of National Food Security & Research briefed the ECC on the feedback received from various farmers’ associations as well as different government forums and requested for fixing the minimum support price of wheat at Rs 1400 per 40 kg.

    The ECC deliberated on the proposal at length and in view of the discussion and input regarding the impact of any further increase in wheat price on food inflation and financial impact on the commodity stock operations, decided to raise the minimum support price of wheat to Rs 1365 per 40 kg.

    The ECC also viewed a presentation from the Ministry of Finance on the government commodity operations which had over the years resulted in Rs 757 billion as total debt and liabilities and recommendations for reducing the debt.

    The ECC also considered a proposal from the Ministry of Energy regarding tariff rationalization for power sector in the first quarter of financial year 2019-20 and a approved proposal for notifying the NEPRA approved quarterly adjustment of 15 paisa per unit after incorporating a additional charge of 11 paisa per unit for maintaining uniform tariff on all categories of consumers except lifeline and domestic consumers.

    The increase coming into effect on December 01, 2019 for the next twelve-monthly billing cycle would not be applicable to nearly 20 million using up to 300 units per month, out of the total 30 million consumers while 600,000 of the remaining one million consumers would only pay 7 paisa per unit as a result of this increase.

    The ECC also constituted a committee headed by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh and comprising Minister of National Food Security and Research Makhdoom Khusro Bakhtiar, Prime Minister’s Advisor on Commerce and Investment, Abdul Razak Dawood and Special Assistant to Prime Minister on Petroleum Nadeem Babar to examine the current framework of determining power tariff and make it more simple in line with the practice in mature markets.

    The ECC also considered a set of proposals from the Ministry of Energy (Power Division) for risk mitigation post privatisation of National Power Parks Management Company, especially the impact on fuel basket price due to non or reduced off take of 66 per cent generation under the PPA till year 2024 and cost of diversion of Regasified Liquefied Natural Gas (RLNG) to other sectors with workable options to mitigate the risk.

    The ECC discussed the proposals in details and approved them with a proviso that any other option that could be considered as part of the mitigation plan by the Power Division could also be taken into account and approved, if found suitable, by the ECC. To a proposal by the Ministry of Industries and Production, the ECC constituted an inter-ministerial committee under the chairmanship of Minister Planning, Development and Reforms and comprising Adviser to Prime Minister on Industries and Production, Special Assistant to Prime Minister on Petroleum, Secretary Finance, Secretary Industries and Production and Chairman FBR for preparation of a policy framework for promotion of steel and iron in the country through foreign direct investment.

    The ECC also considered a proposal by the Ministry of Communications that all cash development loans and foreign loans, whether direct or relent, including interest accumulated thereon, received up to June 30, 2019 by the National Highway Authority be converted into government grant or the Government of Pakistan may either “write-off” the said loans while for future, all PSDP allocations including relent/direct loans, both rupee and foreign exchange component i.e. for non-commercially viable projects and for strategic/defence roads to NHA may also be provided as government grant.

    The proposal also sought the CDL may be advanced only for commercially feasible projects on which Finance Division and NHA mutually agree regarding the terms and conditions of the loan and its repayment or these viable projects may be undertaken by NHA in PPP/BOT mode of financing.

    The ECC discussed the proposals and in view of input from the members constituted a committee comprising Minister for Planning, Development and Reforms, Secretary Finance, Secretary Communications, Secretary Economic Affairs Division and Deputy Chairman Planning Division to examine the proposals and submit their recommendations to the ECC.

    The ECC also took up a proposal from the Ministry of Industries and Production for a technical supplementary grant of Rs 6 billion to the Utility Stores Corporation (USC) for subsidy and procurement of essential commodities, including flour, ghee/oil, rice, sugar and pulses, to be sold at a fair price to the poor segment of the society.

    The ECC discussed the issue in detail and in view of input from the members, asked the Utility Stores Corporation to prepare within the next few days a practical and comprehensive mechanism involving use of information technology to ensure the disbursement of specific food items to the poorest of the poor.

    The ECC also constituted a committee comprising Adviser to Prime Minister on Industries and Production, Governor State Bank of Pakistan, Benazir Income Support Programme Chairperson and representatives from NADRA and PPRA to advise and assist the USC to firm up their proposals and present them to ECC.

  • ECC approves Rs30bn for redemption of sales tax refund bonds

    ECC approves Rs30bn for redemption of sales tax refund bonds

    ISLAMABAD: The government has approved Rs30 billion for redemption of sales tax refund bonds issued by the Federal Board of Revenue (FBR).

    The Economic Coordination Committee (ECC) of the Senate in a meeting yesterday took up a proposal by FBR and approved a technical supplementary grant to the tune of Rs 30 billion for the redemption of bonds issued by the “FBR Refund Settlement Company Limited” to the tune of Rs 30 billion, and payment of sales tax refunds by FBR in the form of cheques in accordance with the prescribed rules.

    The ECC also approved a proposal by the Commerce Division for declaration of the erstwhile zero-rated sectors, namely Textiles (including jute), carpets, leather, sports and surgical goods as “Export Oriented Sectors, which includes Textiles, Carpets, Leather, Sports and Surgical Goods”.

    On another proposal by the Ministry of Information Technology & Telecommunication for exemption of 8 percent minimum Income Tax for National Telecommunication Corporation, the ECC constituted a body comprising Minister for Economic Affairs Division Muhammad Hammad Azhar, Minister for Information Technology & Telecommunication Khalid Maqbool Siddiqui, Chairman Board of Investment and a representative from FBR to review the proposal and present suitable recommendations to ECC.

  • Simplified tax regime for non-residents approved: Dr. Hafeez Shaikh

    Simplified tax regime for non-residents approved: Dr. Hafeez Shaikh

    ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approved a simplified tax regime to facilitate the non-resident companies for investment in the local capital market.

    Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance said that the ECC had approved a simplified tax regime to facilitate the non-resident companies for investment in the local capital market.

    Dr. Abdul Hafeez Shaikh said that these incentives will increase the foreign exchange inflows and reserves of the country.

    A statement issued after the ECC meeting stated that the meeting has approved separate proposals for simplification of tax regime for non-resident companies investing in the local debt market, revision of cess rate on tobacco for the year 2019-2020 and payment of outstanding amount of Rs 5.85 billion as gas subsidy to the fertilizer industry.

    The approvals were given at a meeting of the ECC which met here at the Cabinet Block with Adviser to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh in the chair.

    The ECC was also briefed on the wheat situation in the country and it was pointed out that while prices were stable in most parts of the country, there were certain areas and places such as Karachi where the wheat and flour prices had escalated.

    The ECC directed the Ministry of National Food Security and Research to sit down with all stakeholders and ensure that the situation does not get out of hands and supply of wheat and flour at regular prices is ensured.

    The ECC also considered a proposal by the Ministry of Energy for application of quarterly adjustment notified on 1st July 2019 to the zero rated industrial consumers and for it to be charged over and above the notified tariff for zero rated industrial consumers at 7.5 cents as well as a proposal to the effect that Financial Cost Surcharge, Neelum Jhelum Surcharge, taxes and positive fuel adjustments would not be part of billing to zero rated sector industrial consumers and would be part of subsidy claims to be picked by the Government of Pakistan.

    The Committee discussed the pros and cons of the proposal in view of its financial implications and asked the Finance Division to hold a meeting with the stakeholders, including the Power Division, Commerce Division and Industries & Production Division and resubmit the case to ECC with solid proposals.

    The ECC also approved proposals submitted by the Ministry of Finance for simplification of tax regime for non-resident companies investing in the local debt market with a view to deepening the country’s capital markets, reducing the cost of debt for the government and increasing foreign exchange inflows and reserves.

    The new tax regime as approved by the ECC would apply to the non-resident companies having no permanent presence in Pakistan.

    The ECC also took up a proposal for extension and rehabilitation of gas network in the oil and gas producing districts of Khyber Pakhtunkhwa and referred the matter to the Development Working Party headed by the Secretary Petroleum for an appropriate decision.