The federal government has convened a meeting of the Inter-Provincial Co-ordination Committee (IPCC) during the second week of next month to settle disputes/issues between the Federation and Provinces. The meeting to be presided over by the Minister of Inter-Provincial Co-ordination, Riaz Husssain Pirzada, will pave the way for early convening of the much-awaited meeting of Council of Common Interests (CCI).
The key issues to be discussed by the IPPC are: (i) Power Generation Policy-2015; (ii) oil and gas matters, raised by the provinces again and again; (iii) allocation of grant-in-aid 2013-14& 2014-15 in favour of public sector universities in Balochistan; (iv) situation analysis of the population welfare; (v) non-payment of income interest amount by Pakistan Steel Mills (PSM) Karachi, reference PAC directive on audit report for 2006-07; (vi) grievances concerning exorbitant Hajj charges, inadequate arrangements and role of Hajj tour operators in Balochistan; (vii) non-acceptance of token tax paid in Khyber Pakhtunkhawa by other provinces; (viii) reciprocal application of domestic tariff to streetlights local bodies and PHE department; (ix) federal government to exceed the limits for the increased tax in respect of professional tax; and (x) change in withholding tax law vide Finance Act 2014.
Well-informed sources told Business Recorder that Ministry of Water and Power held a pre-CCI meeting with the representatives of provinces to get their approval on the Power Generation Policy 2015 which is still not finalised even after its approval by the CCI because provinces have concerns on it. According to sources, the KPK government maintains the view that the premium on tariff should be offered to attract investment in hydel generation.
Ministry of Water and Power argues that in case the proposal of KPK is accepted, the incentive will only be limited to hydel generation. Secretary Water and Power, Younas Dagha, suggested that the word "indigenous resources" instead of hydel resources be used.
The Sindh government proposed that the federal government should be bound to extend GoP guarantee for energy sector projects. Ministry of Water and Power made it clear that the federal government will extend GoP guarantee as Federation but according to Article 162, the Federation cannot be forced to give guarantee for projects being executed by the provinces.
The representative of government of Azad Jamu and Kashimr took the stance that the AJ&K should be treated as a province with respect to fixation of Water Usage Charges (WUC). He cited the reference of an Executive Order of the then President Ghulam Ishaq Khan, in which it had been directed the then government to treat AJ&K as province.
The AJ&K government will provide the directives of the late Ghulam Ishaq Khan. AJ&K will get an additional financial benefit in case it gets treated as a province. Gilgit-Baltistan has raised the question as to why it has not been given the status of a province which was a typographical error.
"Provinces are confused on a Power Generation Policy 2015. The officials who attended the meeting will have to take their top bosses into confidence on the policy," the sources maintained. IPCC, the sources said, will discuss Sindh government's concerns regarding double payment of withholding tax. Federal Board of Revenue (FBR) incorporated changes in Withholding Tax laws through the Finance Act, 2014 and its recovery with effect from July 1, 2014.
At present, two types of advance tax/ withholding tax are collected by the Excise, Taxation & Narcotics Department on behalf of FBR under section 231B - (i) at the time of registration of new vehicles above 850 cc ( one time tax) and (ii) collection of adjustable advance tax at the time of collection of annual motor vehicle tax, as per given schedule.
According to Sindh government, new changes in the collection of advance tax at the time of registration of vehicles will now also be collected at the time of each transfer of ownership of the (private) vehicles till five years from its date of registration. Further, now it will be collected at different rates from the filer of Income Tax Return and non filer of Income tax Return for minimum Rs 10,000 to maximum of Rs 250,000. Similarly at the time of collection of annual motor vehicle tax two categories have been created by FBR ie filer and non-filer of Income Tax Return.
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