The ECC approved freight subsidy for export of 1.2 million tons of sugar. Previously, the govt had provided Rs8 billion in tax relief by lowering federal excise duty to 0.5% to the sugar industry. PHOTO: FILE
ISLAMABAD:
The government has decided to pay a subsidy of Rs1.75 on every kilogramme of sugar. The decision was taken by the Economic Coordination Committee (ECC) of the Cabinet on Wednesday, which approved inland freight subsidy of Rs1.75 per kg for the export of 1.2 million tons of sugar.
The ECC met under the chairmanship of Federal Finance and Economic Affairs Minister Saleem Mandviwalla.
The move came in the wake of slow pace of sugar export and keeping in view the industry’s liquidity position that causes delay in paying dues to farmers.
It was the second favour given to the influential sugar lobby in just a couple of months, as the government has already provided Rs8 billion in tax relief by lowering federal excise duty to 0.5%.
The ECC also exempted all foreign and local loans for the Karachi Circular Railway project from general sales tax, customs duty and other federal levies to ensure financial viability of the project.
To facilitate and accelerate the project, the Ministry of Railways had moved a summary for waiving general sales tax and customs duty on loans for the project.
The KCR is a mega project of national importance and will provide modern rail-based commuter service for the citizens of Karachi at a cost of $2.6 billion. The ECC was told that Japan International Cooperation Agency would provide $2.4 billion on 0.2% markup payable in 40 years, including a 10-year grace period.
The ECC approved a summary of the Finance Division for equity investment in Democratic Republic of Congo. The State Bank of Pakistan evaluated the proposal and recommended that Lucky Cement may be allowed to remit $40 million on account of equity investment in connection with establishment of a cement manufacturing plant through a joint venture company. The State Bank set a condition, saying the company would arrange foreign exchange from the open market and the outflow would be coordinated with the central bank.
In order to provide fiscal relief and rehabilitate the economic life in Khyber-Pakhtunkhwa, Fata and Pata, the ECC agreed that the areas of Hub and Hattar may be included in the tax amnesty scheme being offered to ghee manufacturers and exporters based in Khyber-Pakhtunkhwa and Balochistan. This summary was sent for approval by the Federal Board of Revenue.
The ECC endorsed the “Framework for Power Cogeneration 2013 (Bagasse/Biomass)” for inclusion in the Renewable Energy Policy 2006. This framework will be for all high-pressure cogeneration projects utilising bagasse and biomass.
The Renewable Energy Policy 2006 was also extended for five years. A summary recommending this was moved by the Ministry of Water and Power.
Published in The Express Tribune, March 7th, 2013.
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