- Also expected to grant sales tax exemption on CNG buses’ import
By Sajid Chaudhry
ISLAMABAD: The Economic Coordination Committee of the Cabinet is expected to approve on Tuesday the proposed auto policy, exemption from sales tax for the public transport sector and the development of New Gwadar International Airport on turnkey basis, a government official told the Daily Times on Monday.
The ECC that will meet under the chairmanship of Prime Minister Shaukat Aziz will take up a 14-point agenda. It will take important decisions relating to different economic sectors. The ECC will consider the proposed auto policy to facilitate the sector and enable it to meet the national requirements as well as exports from the country.
The Engineering Develop-ment Board (EDB) had asked the government to give a long-term tariff structure for at least seven years to the investors in the automobile sector and the Board had described it as the only way to encourage investment both in expansion in the existing industry and setting up new auto firms in the country. The new policy is to be finalized keeping in view of investment committed by three new auto-makers, especially Renault and Mercedeze Benz.
The proposed policy, prepared by the EDB, is backed by the ministry of industries, production and special Initiatives (MOIP&SI). The official, however, admitted that the tax authorities would place their point of view at the ECC meeting to the structure proposed by the EDB. It has been drafted on the demand of the industry to have a long-term policy to enable the industry to make future investment decisions. The draft policy is aimed to have a holistic view of the industry to seek solutions on investments, competitiveness and integration in the international supply chain.
The ECC is also expected to consider exemption of sales tax on the import CNG buses for the public transport sector. The government has been asked to offer CNG to CNG only buses at reduced prices to attract the private sector to invest heavily in the sector and help the government to control environmental problems.
The EDB, which strongly supports the environmentally-friendly CNG buses, is of the view that the government should study and follow the Korean model where nine CNG filling stations for buses with a capacity to fill 20 buses simultaneously have been installed in Seoul by the Korean government. New rules should be incorporated in the urban transport system for exclusive routes of CNG buses. Incentives are required to be offered by the government for attraction of transport operation for only fully dedicated CNG buses.
The ministry of petroleum and natural resources has proposed to the ECC utilization of Production Bonus Obligation of the exploration and production companies in the oil and gas sector like utilization of royalty. The ministry has proposed that this bonus may be deposited with the federal government which onwards be transferred to the relevant province and subsequently be transferred to the district concerned for development projects.
The ECC is to allocate gas from Mari Deep Zamzama to the power sector. The ECC will also fix the price of gas for the fertilizer plant being set up near Qadirpur. The meeting will also give go-ahead to the establishment of a coastal oil refinery at Khalifa Point by IPIC of Abu Dhabi.
The meeting is expected to convert a Rs 10 million loan into equity granted to the National Book Foundation.
The ECC will also review the economic performance, imports and exports, tax collection and foreign exchange reserves position and flows of foreign direct investment during the first quarter (July-September) period of the current fiscal year. The meeting will be informed about cement, edible oil, ghee, sugar and other essential commodities’ availability and prices in the country. The ECC will also review the prices of essential items in the countries of the region.