A meeting of the Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved separate proposals for simplification of tax regime for non-resident companies investing in local debt market, revision of cess rate on tobacco for the year 2019-20, and payment of outstanding amount of Rs 5.85 billion as gas subsidy to fertilizer industry. The ECC meeting presided over by Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh after receiving a briefing from the Finance Division on separate tax regime for non-resident companies decided to approve the proposal with a view to increasing investment in local debt market.
The ECC was also briefed on the wheat situation in the country and it was pointed out that although prices are stable in most parts of the country, yet there are certain areas and places such as Karachi where wheat and flour prices have escalated.
The ECC directed the Ministry of National Food Security and Research to sit down with all stakeholders and ensure that the situation does not get out of hand and supply of wheat and flour at regular prices is ensured.
The ECC also considered a proposal of Ministry of Energy for application of quarterly adjustment notified on July 01, 2019 to the zero-rated industrial consumers and for it to be charged over and above the notified tariff for zero-rated industrial consumers at 7.5 cents as well as a proposal to the effect that financial cost surcharge, Neelum-Jhelum surcharge, taxes and positive fuel adjustments, would not be part of billing to zero-rated sector industrial consumers and would be part of subsidy claims to be picked by the government.
The ECC also discussed the pros and cons of the proposal in view of its financial implications and asked the Finance Division to hold a meeting with the stakeholders, including the Power Division, Commerce Division and Industries & Production Division, and resubmit the case to ECC with solid proposals.
The ECC also approved proposals submitted by the Ministry of Finance for simplification of tax regime for non-resident companies investing in the local debt market with a view to deepening the country's capital markets, reducing the cost of debt for the government and increasing foreign exchange inflows and reserves.
The new tax regime as approved by the ECC would apply to the non-resident companies having no permanent presence in Pakistan. The ECC also took up a proposal for extension and rehabilitation of gas network in the oil and gas producing districts of Khyber Pakhtunkhwa and referred the matter to the Central Development Working Party headed by the secretary petroleum for an appropriate decision.
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