ISLAMABAD - The Economic Coordination Committee (ECC) of the cabinet on Tuesday approved tax exemptions for two projects under the China Pakistan Economic Corridor (CEPC).

The ECC meeting, chaired by Finance Minister Ishaq Dar, considered and approved the proposal submitted by Ministry of Communications for the grant of exemption from customs duties, levies and other relevant taxes for import of equipment and construction material to contractors for the completion of two early harvest projects of Karakorum Highway (KKH) phase II (Thakot to Havellian section) and Karachi-Lahore Motorway (Sukkar to Multan section) under the CPEC.

Pakistan had already awarded the contracts of these two projects to the Chinese firms. Sources informed that Chinese firms had demanded tax exemptions for the projects under CPEC.

The top economic decisions making body of the country, ECC, also considered the proposal submitted by the Ministry of National Food Security and Research for allowing additional rebate of $30 per ton on the export of surplus wheat/wheat flour (atta) in order to allow the exporters to sell the wheat/flour on competitive rates. ECC earlier granted rebate @ $55 and $45 to the provinces of Punjab and Sindh. Both provincial governments also contributed $35 and $45 per ton respectively as their share in the export rebate. On a fresh proposal submitted for consideration, it was stated that the export be allowed till 30th November 2016 and export process be completed by 31st January 2017. ECC granted approval to the proposal on the condition that the additional rebate @ $30 shall be shared equally by the federal and provincial governments. Wheat export subsidy must be enhanced from the current $100 per ton to $130 per ton.

Sources informed The Nation that federal government has rejected the proposal of the provincial governments that 60% share of the subsidy should be contributed by the federal government and 40% by the provinces. In a summary submitted by the Ministry of National Food Security and Research in April 2016, recommendation was made to allow an additional rebate of $30 per ton on exports. It was proposed that the additional $30 rebate would be shared by both the federal and provincial governments on 50% basis. The proposed quantity allowed to be exported is 600,000 and 300,000 tons for Punjab and Sindh, respectively. The export will be allowed till November 30, 2016.

On a proposal from Finance Division, ECC approved the remittance of AED 100 million, which is equivalent to $27.2 million, on account of planned opening of wholesale Branch of Bank Alfalah Limited in UAE. According to the proposal, this investment will help create employment opportunities for Pakistani nationals in UAE which is also keenly desired by the government of Pakistan.