It is a matter of grave concern that some of the regulatory bodies appear to be reluctant to pay fees/charges prescribed by the government to the Competition Commission of Pakistan (CCP). According to reliable sources, the CCP has informed the Ministry of Finance about this and complained that some regulators were resisting the transfer of three percentage charges on quarterly basis to their organisation.
The government, it may be recalled, had notified payment of this fee to the CCP for meeting its expenses. In its letter to the Finance Ministry, the CCP has accused the regulators of adopting delaying tactics for non-payment of charges on various pretexts and also written about the problems and difficulties faced by the regulators in complying with the government directive for the payment of three percent fee/charges to the Commission.
Some of the regulators were not even communicating with the CCP on the issue while others had taken the plea of discussing financial matters with their chartered accountants before making payment. The above situation, by all indicators, is ludicrous.
The Competition Commission Rules, 2009 stipulate the transfer of fees and charges levied by regulatory agencies and the percentage of fees/charges has to be prescribed and notified by the Federal Government from time to time. The percentage now prescribed is effective from the financial year 2008-09 and cannot be varied at any stage to the disadvantage of the Commission.
The regulatory agencies are required to furnish all information about collection of their receipts in respect of fees and charges that may be required by the government and these receipts upon transfer by the regulatory agencies shall become part of the CCP Fund.
According to the rules, the regulatory agencies shall issue standing instructions to their bankers for transfer of the prescribed percentage of their total fees and charges collected during each quarter, for credit to the account of the Commission, by the tenth of the month following the relevant quarter, under intimation to the CCP. The regulators liable to pay specified fee to the CCP at present include SECP, NEPRA, OGRA, PTA and PEMRA.
The importance of an autonomous body to ensure fair competition in a free market economy is indeed too great to be ignored. Without a proper watchdog, the entrepreneurs in an effort to maximise their profits could exploit the system to their advantage with monopolistic and restrictive practices.
However, the experience has shown that such a powerful body should be financially independent in order to avoid government interference in its day-to-day affairs. This does not, however, mean that it should be a money-making entity but could only be enabled to charge as much as is sufficient to ensure its continued existence.
Pakistan did not have a strong body to oversee monopolistic trends due to low level of industrial and business activity in the country but, of late, the need for such an institution has been increasingly felt and the government has responded appropriately to the situation by vesting the CCP with adequate powers and financial autonomy.
The relevant rules and guidelines on the subject are very clear and straightforward and the regulators identified by the government have to deposit a specified percentage of their fees/charges in the account of the CCP. In all fairness, these regulators could agitate against the law but cannot avoid its compliance at this stage. A sheer violation of law cannot be condoned in a civilised society.
We also feel that certain complaints of the regulators like excessive fees to be transferred to the CCP or a uniform rate on all the regulators without due regard to the size of their business may be genuine but these are the matters which have to be discussed with the relevant authorities with a request to review them and amend the law accordingly.
All the concerned parties need to behave rationally and with an open mind so that the regulators affected by the new rules are not unduly burdened, cost of doing business in the country does not go up, and the basic purpose of the law is served. The CCP has raised a serious issue which needs to be addressed at the earliest to enhance its autonomy and clout and satisfy the grievances of the relevant quarters.