ISLAMABAD: Amid rising prices, the government on Wednesday decided to allow tax- and duty-free import of 800,000 tonnes of sugar and 300,000 tonnes of wheat to beef up buffer stocks.
The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Finance Minister Dr Hafeez Shaikh.
The ECC allowed tax- and duty-free import of 500,000 tonnes of refined sugar through the public sector and another 300,000 tonnes of raw sugar by sugar mills.
Prime Minister Imran Khan had on Dec 12 publicly congratulated government agencies whose coordinated efforts helped reduce sugar prices to about Rs80 per kg from well above Rs100 per kg. However, the prices went beyond Rs90 over the next few weeks, touching Rs100 per kg in Lahore and Karachi. This was reportedly based on speculations that sugar shortages may emerge again.
The ministry of finance said the decision for import of sugar was taken on the advice of the Ministry of Industries to reduce upward pressure on prices of sugar and to buffer up carryover stocks before the arrival of the fresh crop.
“The ECC approved reduction of Withholding Income Tax on commercial import of white sugar and raw sugar form 5.5pc to 0.25pc and removal of Value Added Sales Tax on import of white sugar,” it said.
The reduction in taxes would incentivise the sugar mills for import of 300,000 tonnes of raw sugar up to June 30. The ECC directed Trading Corporation of Pakistan (TCP) to import white sugar up to 500,000 tonnes, if and when needed, during the current season.
On the request of the Ministry of National Food Security and Research, the ECC also authorised the TCP to make immediate arrangements for import of 300,000 tonnes of wheat through tendering process as ratified by the cabinet. The PASSCO was nominated as the recipient agency for the imported wheat to replenish its stock as needed. It was reported that wheat import was important to increase stocks that would easily last until April when new produce starts coming in.
The ECC also approved allocation of 60,000 tonnes of wheat for Balochistan’s food department from PASSCO’s existing stock on the subsidised rate as per previous practice.
The Ministry of Religions Affairs and Interfaith Harmony presented a summary for scaling up of ‘Road to Makkah Pilot Project’ from Islamabad airport to two more cities i.e. Karachi and Lahore to facilitate Hujjaj for performing Hajj under the government scheme. One of the pre-conditions for scaling up of the project was grant of special exemption on the import of technical equipment in Pakistan by Saudi Arabia.
The ECC decided that Federal Board of Revenue would hold a separate consultation with the Ministry of Religions Affairs and Interfaith Harmony to work out details and matter would be placed in next meeting of the committee for approval.
The Aviation Division presented a summary to reconstitute a high powered committee headed by the deputy chairman of Planning Commission and including secretaries of finance, aviation and law and justice to deliberate on financial challenges faced by the Roosevelt Hotel, New York, US. The committee approved the request. The hotel needs another support of $36 million.
The meeting also discussed National Freight and Logistics Policy framework and directed the ministry of communications to identify and segregate actionable items which fall under its domain and place them before next ECC meeting for final approval.
The proposals pertaining to other ministries and provinces would be considered separately under some institutional arrangement at an appropriate forum – the federal cabinet or the Council of Common Interests as the case may be.
Discussion on draft Textiles and Apparel Policy, 2020-25, prepared by the Ministry of Commerce, was postponed to the next ECC meeting.
The meeting also decided that gas rate of Rs772 per million British thermal unit (MMBTU) will be applicable to Agritech and Fatima Fertiliser after November 2020 till January 2021 on the request of the Ministry of Industries and Production.
The ECC also approved exemption of 17pc sales tax and 3pc additional sales tax on the import of 52 fire fighting vehicles by the Sindh Infrastructure Development Company Limited (SIDCL).
The Ministry of Communications updated the meeting about the progress on conversion of loans of the National Highway Authority (NHA) into government loans and sought a period of nine months to prepare a commercially viable business plan in consultation with other ministries. The NHA’s debt restructuring would be linked with the outcome of the said business plan.
The ECC approved the proposal that outstanding mark-up accrued till date on all cash development loans on NHA should be capitalised as on June 30, 2020. There will be a moratorium on further accrual of mark-up till the finalisation of the business plan.
The ECC also approved five technical supplementary grants of Rs17.1 billion. This included Rs16.628bn for the Planning Commission for completion of 21 schemes of the SIDCL, Rs10 million for purchase of spare parts for helicopter maintenance by Frontier Corps Balochistan, Rs81.40m to the Ministry of Law and Justice for the establishment of three courts, Rs82.5m for completion of 1,000 Industrial Stitching Units all over Pakistan Project and Rs300m for completion of 132KV grid station at Bin Qasim Industrial Park.