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  • Oct 7th, 2017
  • Comments Off on ECC takes major decision on PM”s export package
The Economic Co-ordination Committee (ECC) of the Cabinet has approved 50 percent of the export package incentive for eligible textile and non-textile sectors on the same terms as for the period from January 1 to June 30, 2017 without condition of increment with the objective to boost exports.

A meeting of the ECC chaired by Prime Minister Shahid Khaqan Abbasi on Friday considered the proposal of Commerce Ministry with respect to Prime Minister''s Export Package and decided that the remaining 50 percent of the rate of incentive would be provided if the exporter achieves an increase of 10 percent or more in exports as compared to the corresponding period of the last year.

The meeting also decided that an additional 2 percent drawback would be provided for export to non-traditional markets. Besides, expeditious settlement of payments claims by the State Bank of Pakistan (SBP) was also approved. Various measures for rationalization of imports and reducing the import bill were also suggested by Commerce division and Federal Board of Revenue. Detailed lists of import items would be reviewed and finalized.

Sources said a committee constituted by the ECC with Secretaries Finance, Commerce and Chairman, Federal Board of Revenue after detailed deliberations recommended: (i) 50 percent of the rate of incentive for the eligible textile and non-textile sectors already announced in the PM package may be provided on the same terms as for the period January to June, 2017 i.e. without conditions of increment; (ii) the remaining 50 percent of the rate of incentive may be provided, if an exporter achieves an increase of 10 percent or more in exports as compared to corresponding period of the last year; (iii) the actual rate of the incentive may be determined on the basis of annual performance of an exporter, but in order to improve his/her cash flow, the disbursement against recommendation may be made on the performance during July-December 2017 subject to submission of a bank guarantee that the exporter will return the excess amount, in case his/ her annual exports are less than the amount of drawback paid to him/ her;(iv) an additional 2% incentive may be provided for exports to non-traditional markets - Africa, Latin America, non-EU European countries, Commonwealth of Independent States and Oceania.

They added that in order to facilitate the exporters in prompt payment of refunds, it was also proposed that SBP may be instructed to release the amounts of claims of exporters through the banks immediately upon verification of claims and get the reimbursement from the Finance Division after such payments have been made. SBP in consultation with the Commerce Division and stakeholders would devise a mechanism to ensure prompt clearance of drawback claims in compliance with the decision.

As against the exports amounting to Rs 712.96 billion during Jan-June 2017 against the rate of incentive, the admissible liability for the said period would have been Rs 42.94 billion. However, claims amounting to Rs 19.824 billion have been received by State Bank of Pakistan as of September 22, 2017, which is 46.1 % of the admissible liability. On the assumption exports will increase by 10% and that 80% of total admissible amount will be claimed the estimated financial implication for the year 2017-18, as calculated with Finance Division, will be Rs 78.01 billion out of which an amount of Rs 47.13 billion is estimated to be claimed during the current financial year.

The ECC also approved a proposal submitted by the Commerce Ministry to allocate additional quantity of 12 million kilograms of surplus tobacco to all the tobacco companies and dealers on pro-rata basis and deregulated the margins on High-Speed Diesel for the Oil Marketing Companies (OMC) and dealers under the policy of liberalization and deregulation. The impact of the policy would be reviewed after three months. The meeting decided that OMCs would add Fuel Marker in HSD within six months at depot stage to avoid adulteration. The ECC further decided that OGRA would develop a mechanism to monitor the OMCs'' commercial stock position, the dealers'' inventory system and Fuel Marker System.

The ECC provided a provisional approval of the issuance of Government of Pakistan''s sovereign guarantee for Rs 39 billion for construction of 2X660MW Coal Power Project Jamshoro, subject to a third-part evaluation especially pertaining to demand and supply situation.

The ECC also extended the period of provision of subsidy to agricultural tube-well consumers in Balochistan till 31 December 2017 subject to commitment of past payments by all concerned/stakeholders on same terms and conditions as approved earlier by the ECC on 17.06.2015. The meeting decided that approval is linked with a comprehensive review of solarization of the tube-wells to be undertaken on a priority basis in order to save electricity bills and the subsidy being provided by the federal and the provincial governments. The ECC also emphasized the need to put in place efficient irrigation methods. The ECC approved a summary for extending the period of applicability of reduced rate of 0.4 percent advance income tax on banking transactions of non-filers under section 236P of the Income Tax Ordinance 2001 upto December 2017.



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