Cabinet for resolving CPEC SEZ issues

Gives directives to ministries to address dividend, revolving fund, tax matters

ISLAMABAD:

The cabinet has directed the ministries concerned to resolve the issues of dividends, revolving fund and taxation pertaining to the CPEC Special Economic Zones (SEZs) as a positive signal before the upcoming visit of Prime Minister Shehbaz Sharif to China.

Sources told The Express Tribune that the cabinet in a recent meeting directed the CPEC (China-Pakistan Economic Corridor) Secretariat to expedite the finalisation of sustainable projects for five corridors under CPEC phase-II before the PM’s trip to Beijing.

The five corridors include livelihood, innovation, green energy, open and inclusive regional development.

The cabinet urged the Ministry of Finance to clear the dividends owed to the Chinese firms operating in Pakistan well ahead of meetings with Chinese counterparts to portray a positive image of the country. Regarding the revolving fund, the cabinet gave directives that the Power Division, Petroleum Division, Ministry of Finance and Ministry of Planning should meet to come up with a solution.

While considering the imposition of minimum taxes in the CPEC SEZs, the Ministry of Finance was directed to take immediate action to withdraw them. It was pointed out that first meeting of the Cabinet Committee on Chinese Investment Projects (CCOCIP) had been held recently.

The minister for planning, being the committee chairman, apprised the cabinet that the security of Chinese nationals in Pakistan, overdue payables to CPEC independent power plants (IPPs), revolving account for the IPPs, provision of electricity to the Rashakai SEZ and incentive packages for SEZs were discussed in the first CCOCIP meeting.

For the security of Chinese nationals, the CCOCIP directed the Interior Division to continue taking concrete measures to restore the confidence of Chinese and other investors.

It decided to adopt a holistic approach to address security concerns, including raising awareness among local communities where Chinese nationals were working.

It was decided to establish standard operating procedures (SOPs) for high-security measures to instill confidence in the security measures taken for foreign nationals in Pakistan. Possibilities could also be explored for recruiting security personnel on a contract basis instead of only on a permanent basis.

Regarding the outstanding dues of IPPs and the revolving account, the CCOCIP directed the Power Division to provide comprehensive briefings in the next meeting.

While discussing the provision of electricity to the Rashakai SEZ, the CCOCIP directed the Power Division to resolve the issue by involving the National Electric Power Regulatory Authority, Board of Investment and the CPEC Secretariat.

The cabinet considered a summary titled “Ratification of decisions taken by the Cabinet Committee on Chinese Investment Projects in its meeting held on April 30, 2024,” and endorsed the decisions.

Published in The Express Tribune, May 16^th, 2024.

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