ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approveddifferent policies pertaining to Mobile Device Manufacturing, ElectricVehicles, New Re-lending-2020, in addition to removal of 4 percent tax onlocally manufactured phones and issuance of offshore Pakistan Rupee-linkedBonds to the International Finance Corporation (IFC).
The ECC meeting was chaired by Federal Minister for Finance and Revenue Dr.Abdul Hafeez Sheikh, according to press statement issued by the FinanceMinistry.
“The ECC approved Mobile Device Manufacturing and Electric Vehicles Policy(02-03 wheelers and HCVs) presented by the Ministry of Industries andProduction,” it said.
After due deliberation, the forum approved removal of withholding tax of4pc on manufacturing to retailers of locally manufactured phones toincentivize the sector.
Moreover, removal of Sales Tax on locally manufactured phones was alsoapproved in principle and modalities would be worked out in consultationwith the Finance Division.
The ECC also approved various technical supplementary grants (TSP)including Rs. 219.300 million for the operationalization of the newlyestablished Isolation Hospital and Infections Treatment Centre, Islamabad;and Rs. 305.462 million to payoff Pakistan’s annual contribution to WorldHealth Organization (WHO).
The committee also approved Rs.106.775 million TSP for the ICTAdministration for various projects; Rs. 706.82 million for FATA, temporarydisplaced persons, Emergency Recovery Project, NADRA; Rs. 278.091 millionfor Annual Contribution of Pakistan to UNFA, PPD & IPPF-FPAP forFY-2018-19, 2019-20 & 2020-21; and Rs. 53.10 million for procurement ofmedical equipment, machinery and medicines to combat COVID-19.
On the occasion, the Finance Secretary briefed the forum aboutrationalization of subsidies (phase-I) whereas a detailed presentation wasgiven by SAPM on Revenue focusing on Electricity, Food and National Savingsduring the first phase.
The Chair appreciated the detailed plan for rationalization of subsidies,its various components and directed to present a comprehensive summary withconcrete proposals suggesting a way forward before ECC.
Priority berthing for wheat and sugar imports was also discussed during themeeting.
Minister for Maritime Affairs updated the forum about latest position ofwheat vessels and operations of Karachi Port Trust (KPT) and Port QasimAuthority (PQA) accordingly.
The Chair directed that the Logistic Committee of the ECC would be chairedby the Minister for Maritime Affairs to work out SOPs ensuring allstakeholders including private sector are on-board with reference topriority berthing.
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Ministry of National Food Security and Research presented a summary forprovision of additional quantities of wheat to the Government of AJ&K andUtility Stores Corporation.
The Chair directed to provide first load of the additional quantities toboth AJ&K and USC on priority as an interim arrangement to ensure smoothsupply of wheat across the country. The detailed proposal would bediscussed in the next ECC meeting.
The ECC approved the new re-lending policy 2020, presented by EconomicAffairs Division. The new re-lending policy will reflect the changes in theborrowing cost of the government, take into account variation in theexchange rate and pass on actual rates to the borrower for transparency.
Other terms and stipulations, including with respect to recovery ofcommitment fee as in the policy in vogue, will continue to apply.
The ECC also accorded approval for issuance of offshore Pakistan Rupee(PKR) linked Bonds to the International Finance Corporation (IFC).
This will help in availability of financing to priority sectors, promoteprivate sector investments and bring foreign exchange liquidity in domesticforeign exchange market in the post-COVID-19 scenario.
The Karachi Transformation Plan was postponed to the next ECC meeting.
Among others, the meeting was attended by Minister for Interior SheikhRashid Ahmed, Minister for Industries and Production Hammad Azhar, Ministerfor Economic Affairs Khusro Bakhtiar, Adviser to the Prime Minister onCommerce Abdul Razak Dawood, Adviser to the PM on Institutional Reforms andAusterity Ishrat Hussain, Special Assistant to PM (SAPM) on Revenue Dr.Waqar Masood, SAPM on Petroleum Nadeem Babar, Federal Minister for MaritimeAffairs Ali Haider Zaidi, SAPM on Poverty Alleviation and Social Safety Dr.Sania Nishtar, SAPM on Energy Tabish Gauhar, Federal Minister forPrivatization Muhammad Mian Soomro and Federal Minister for Energy OmarAyub Khan.
Governor State Bank of Pakistan Dr. Reza Baqir joined the meeting throughvideo link, the statement added.
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