ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved in principle to exempt cost of electricity from minimum tax for further one year on the ground that financial position of power distribution companies (Discos) is very weak.
The ECC, which met under the chairmanship of Finance Minister Senator Ishaq Dar, approved in principle one year extension in FBR’s SRO of February 21, 2008 on the ground that NEPRA has directly determined tariff for the current year and. Secondly, the burden should not be passed on to the consumers. According to reports, if the price of electricity is subjected to minimum tax, the corporatized entities of Wapda, which are presently acting as agencies of power sector, will be burdened with multiple taxation. It will result in undue discrimination between the aforesaid corporatized entities of Wapda and the companies independently to determine their margin of profit on the whole of their turnover. This multiple taxation will not only undermine the financial viability of the corporatized entities of Wapda, but also will ultimately result in higher cost of power adversely affecting the economic growth.
Therefore, the top economic decision-making body of the country has exempted the cost of electricity from minimum tax for further one year. Meanwhile, the ECC further decided to constitute a committee comprising secretaries Ministry of Finance, Water and Power and Chairman FBR to work out modalities for the said extension.
Sources said that ECC did not take decision to approve award of $1.2 billion LNG services contract with Engro Vopak Terminal Limited (EVTL) to ensure first flow of LNG in November this year. Sources said that ECC has deferred the issue.
Meanwhile, the committee rejected the proposal of further export of sugar, as the ECC directed Ministry of Commerce to exhaust its earlier sugar export bracket of permission (four lac (0.4 million) tons) and revert to ECC.
ECC considered Cabinet Division’s summary for proposed amendments in OGRA Ordinance to monitor prices of all refined oil products and decided to constitute a committee led by Minister for Science and Technology, with secretaries’ representation from Law and Justice, Finance and OGRA to consider afresh proposed amendments and other amendments, if any, in OGRA Ordinance before its referral to ECC for consideration of approval and subsequent placement in CCI for final decision.
It considered Ministry of Planning, Development and Reforms report on import and distribution of fertilizer but deferred consideration for want of necessary homework. It constituted a sub-committee of ECC under Minister for Planning and Development to review jurisdictional placement of different federal government organizations after devolution (post-18th Amendment) for review on professional lines, focusing synergy, improved governance and coordination. The said sub-committee shall comprise ministers and secretaries from renamed and recreated Federal Ministries/Divisions in post- devolution governance scene. ECC further directed the said sub-committee to complete its due deliberations and submit recommendations for improved governance and streamlined functioning of federal government organizations within three weeks.
The meeting was informed that CPI for the month of January 2014 declined to 7.9% as compared to 9.5% of the same month last year. Further, in view of the fact GDP has grown prominently to 5.2% in first quarter of this financial year as against 2.9% of same quarter last year. IMF has revised upward its projection of GDP growth from 2.8% to 3.1%. IMF has expressed satisfaction as growth is picking up and economy is moving in the right direction.
ECC of the Cabinet considered Cabinet Division’s report on implementation status of 968 decisions pertaining to the period from 25.3.2008 to 16.3.2013 and 6.6.2013 to 12.2.2014. The ECC was informed that so far 865 decisions have been complied which come to 89% implementation status. The Cabinet Division submitted the Implementation Report to ECC of the Cabinet in terms of Rule-24(5) of Rules of Business-1973. The ECC, while reviewing the implementation status, expressed satisfaction over 89% compliance report and directed Cabinet Division to seek implementation report for the remaining 103 decisions which related to various Federal Government Ministries/Divisions.
While considering the satisfactory implementation status of its previous decisions during the period under report, ECC directed Aviation Division to submit its viable business and fleet expansion plan on fast track basis — while completing necessary consultative process with relevant GOP stakeholders. It further directed Commerce and Textile Industry Division to fast track implementation of its earlier decisions taken during January 2014 and submit compliance report in the next ECC meeting.