ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved Rs 4.5 billion supplementary grant for the Export Development Fund (EDF) during the current fiscal year.

Sources said that the ECC meeting presided over by Finance Minister Shaukat Tarin in March 17, 2022 was informed that the federal cabinet in its meeting held on 30-05-1991, decided that an Export Development Surcharge (EDS), equivalent to 0.25 percent of the export value, may be levied on all exports, with effect from 1st July 1991 and that the proceeds of the surcharge should be transferred by the government to the EDF, for distribution among various Chambers of Commerce and Industry and Export Associations for export development.

The EDF was later established through a resolution on 1st September 1992 and subsequently, the Act called the EDF Act, 1999 was passed, which was later amended in 2005. As per provisions of the Act, the Fund consists of whole receipts of Export Development Surcharge (EDS), any income accruing from its investments, property etc and is non-lapsable.

The Act further stipulates that the Ministry of Finance will propose to the Parliament an appropriation equivalent to the receipts of the EDS collected during the preceding year which will be transferred to the Fund after the approval of budget estimates for the year.

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The Cabinet, while ratifying the case dated 09-11-2021 for approving Strategic Trade Policy Framework 2020-25 has already approved that beginning from fiscal year 2020-21 and henceforward, the entire amount of EDS will be transferred to EDF.

In terms of government of Pakistan, Revenue Division’s notification SRO 10(1)/2003 dated January 04, 2003 and State Bank of Pakistan Circular 02 dated January 22, 2003, the EDS is collected by the authorised dealers at source from the rupee amount converted from the foreign currency (FCY) on receipt of export proceeds and is later credited to federal government under sub-head EDS maintained with the NBP.

The collection during financial year 2020-21 as per information provided by the NBP was Rs9,476,275,757, whereas, the EDF has only been allocated Rs1,500,000,000 for fiscal year 2021-22. The Finance Division has agreed to the proposal of the Ministry of Commerce to move a summary to the ECC of the Cabinet for grant of additional Funds of Rs4.5 billion during the current financial year 2021-22.

Copyright Business Recorder, 2022