ISLAMABAD: The Economic Coordination Committee (ECC) has approved to refund sales tax and technical supplementary grant to the tune of 30 billion rupees. The approval was granted in ECC meeting held with Finance Adviser Dr Abdul Hafeez Shaikh in the chair.
The meeting approved amendments in eighteen laws and 25 legal procedures with the aim to simplify and facilitate investments in oil exploration and production. The amendments in the laws were proposed by Energy Task Force and other stakeholders.
ECC also approved renaming of zero rated export sector as export oriented sector, which comprises textile, carpet manufacturing, leather industry, sports and surgical goods. Earlier the ECC was told by the Ministry of Energy that a careful review of the Pakistan Onshore Petroleum (Exploration and Production) Rules, 2013, undertaken in consultation with petroleum industry, consultants engaged for the purpose and under the guidance of the Energy Task Force, had revealed that the rules were unduly stringent and had never been objectively updated to capture the latest regulatory and best business practices with a progressive approach to regulate the energy sector and encourage investment in this sector.
Under the exercise, it was decided to amend the rules to incorporate clear concept of deemed approval, putting timelines for some proposals and elimination of some approvals as well as revision of monthly reporting requirements to quarterly ones and flexibility in conditions for extensions/renewals to accommodate various types of circumstances which are not covered under the existing rules. The ECC considered and approved the proposals.
Under the ECC decision, the amendments would be notified after formal vetting of the Law Division and would become applicable to the new as well as existing licences and leases and the holders of such leases would be allowed to opt to adopt the changes through the signing of supplemental agreements to the PCA or any other instrument to be finalized in consultation with the Law & Justice Division.
The ECC also approved incorporation of similar amendments in Pakistan Petroleum (Production) Rules 1949, Pakistan petroleum (Exploration and Production) Rules 1986, Pakistan Petroleum (Exploration and Production) Rules 2001 and Pakistan Onshore Petroleum (Exploration and Production) Rules, 2009 which would be notified after formal vetting by the Law & Justice Division.
After the said Rules have been repealed, a legally tenable way forward would also be worked out in consultation with the Law & Justice Division. The ECC also considered another proposal from the Ministry of Information Technology and Telecommunication for extension of Government Sovereign guarantee in respect of Telephone Industry of Pakistan, for a further period of two years from 16th September 2019 to 15th September 2021 and payment of loan amounting to Rs2.150 million, inclusive of mark-up of Rs 1.030 billion, for smooth process of revival plan of the TIP.
The ECC discussed the proposal in detail and constituted a seven-member high-level committee headed by Adviser to Prime Minister on Commerce, Textile, Industry and Production Abdul Razak Dawood to review the proposal and submit its recommendations to ECC within two weeks.
On another proposal by the Ministry of Information Technology & Telecommunication for exemption of 8 % minimum Income Tax for National Telecommunication Corporation, the ECC constituted a body comprising Minister for Economic Affairs Division Muhammad Hammad Azhar, Minister for Information Technology & Telecommunication Khalid Maqbool Siddiqui, Chairman Board of Investment and a representative from FBR to review the proposal and present suitable recommendations to ECC.
The ECC also approved a proposal by the Commerce Division for declaration of the erstwhile zero-rated sectors, namely Textiles (including jute), carpets, leather, sports and surgical goods as “Export Oriented Sectors, which includes textiles, carpets, leather, sports and surgical Goods”. The ECC also considered and approved for execution of amendment to the implementation agreements in relation to Thal Nova Power Thar Private Limited and Thar Energy Limited after the ECC in its meeting held on 8th November 2019 had approved a proposal by the power division for amending the implementation agreements in relation to both the firms by increasing the time period from 400 to 490 days for the exercise of Government of Pakistan’s right to terminate both the projects as the amendment did not involve any financial impact either on the Government of Pakistan or the period from 400 to 490 days for the exercise of Government of Pakistan’s right to terminate both the projects as the amendment did not involve any financial impact either on the Government of Pakistan or the consumers.