Islamabad: A meeting of the Economic Coordination (ECC) of the cabinet has approved the tender for import of 120,000 metric tons of wheat besides exemption from taxes and duties on import of auto disable syringes and raw materials/products for local manufacturing of auto disable syringes.
The ECC meeting presided over by Finance Minister Shaukat Tarin, on the recommendations of the Ministry of National Food Security and Research, approved the tender for procurement of 120,000 metric tons of wheat in compliance with the directive of the Cabinet to procure four million metric tons of wheat to build strategic reserves during the current financial year.
The ECC asked the chairman, Trading Corporation of Pakistan (TCP) to expedite efforts for importing wheat to stabilise local prices and to ensure smooth supply of wheat across the country. The finance minister also directed the chairman TCP to present a detailed report to the Adviser on Commerce regarding timeline of wheat import and other requisite details at the earliest.
The ECC also approved a summary moved by the chairman Federal Board of Revenue (FBR) to strengthen Inland Revenue Enforcement Network (IREN) to combat tax evasion and leakages of duties payable on specified goods through enforcement of Track and Trace system. The meeting was informed that the IREN will also check the goods supplied out of erstwhile Fata/Pata areas for ascertaining validity and conformity.
The finance minister remarked that the FBR would create goodwill and avoid harassment in enforcement of rules and regulations for collection of taxes and duties. At the same time, he added that the FBR would take firm action to prevent tax evasion and broaden tax base to contribute to the national exchequer.
A proper system of check and balance will be followed. The minister urged the FBR to use latest technology-based solutions for tax collection to reduce reliance on traditional enforcement methodology.
The ECC, on a summary moved by the Ministry of Maritime Affairs regarding revision in tariff enabling Fauji Oil Terminal and Distribution Company (FOTCO) to meet operating and maintenance expenses which were approved in the year 2000, for the period of the 20 years, but were not revised, approved the revision in tariff for FOTCO, locked for five years, to be paid in equivalent Pak rupees.
The ECC constituted a sub-committee comprising representatives of the Ministry of Petroleum, the OGRA, the PSO, M/s AF Ferguson, Ministry of Maritime Affairs, and the Finance Division to be headed by the deputy chairman planning to decide about tariff differential accumulated between 2012 to 2020.
The Ministry of Maritime Affairs moved another summary regarding relaxation to 19 subsidiary companies of the PNSC under Public Sector Companies (Corporate Governance) rules.
The ECC approved relaxation in rules till June 2021 with a direction to explore the option of formulating independent boards for the subsidiaries to be headed by the CEO as per the principles of corporate governance.
A copy of the summary available with Business Recorder revealed that the ECC was told that the Cabinet Committee on Ports and Shipping in its meeting held on 12th April 2001 under the chairmanship of the chief executive of Pakistan had decided that a separate company be established for each of PNSC ships.
This being a policy decision of the federal government in terms of Section 13 of the PNSC Ordinance 1979, 19 private limited subsidiary companies were formed.
The PNSC being a holding company is responsible to manage all the commercial, technical, administrative, and financial matters of these companies via a service agreement signed between the PNSC and the subsidiary companies.
This decision was part of the overall reforms, which were undertaken by the federal government for the profitable revival of the PNSC and merchant shipping in Pakistan and was in line with the international shipping practices.
The primary purpose to create separate subsidiaries for each ship was to limit the liability of each vessel, especially in case of arrest of a vessel by any port, such as in case of a marine pollution incident or any other claims lodged by third-parties as such liabilities may sometimes exceed the value of the vessel, leading to disruption in commercial operations of other vessels owned by the same company due to act of a single vessel.
The Public Sector Companies (Corporate Governance) Rules, 2013 (PSCCG 2013) were introduced in 2013 by virtue of rule 2(g) of PSCCG, 2013, and all 19 subsidiary companies of the PNSC being public-sector companies were required to comply with the requirements of the PSCCG 2013 along with the PNSC (the holding company).
Since the 19 subsidiaries were formed with the objective to limit liability of the PNSC for each ship rather than to form independent companies with diverse operations, the PNSC applied to the SECP for exemption from the application of the PSCCG 2013 for each of its 19 subsidiary companies.
The request of the PNSC was considered by the SECP and granted two times exemption for a period of three years each from 2014 to 2016 and 2017 to 2019, in terms of rule24(3) of the PSCCG, 2013 being competent authority.
After expiry of the latest exemption on June 30, 2019, the PNSC again applied to the SECP for seeking further relaxation.
However, in view of the changes made in the PSCCG 2013 via SRO 2019, the federal government is now the competent forum to grant relaxation.
Therefore, the SECP forwarded the request of the PNSC to the Finance Division for approval of the federal government.
The Finance Division directed the SECP that M/s Pakistan National Shipping Corporation may approach the federal government for requesting relaxation from the Public Sector Companies Corporate Governance/Rules, 2013.
The ECC was further stated that since there is a single vision/mission of the PNSC, and the subsidiaries were also formed under the umbrella of these objectives, if significant issues/key information are placed before 19 different independent boards of subsidiaries for decision making then there would be no common vision/mission of the PNSC and there would be a lack of unity of command.
The Maritime Affairs minister Syed Ali Zaidi, stated that the primary purpose behind forming subsidiaries is to limit liability through individually-incorporated entities by managing one vessel each by the subsidiaries.
In case, the required relaxation from the PSCCG for subsidiaries is not granted, the PNSC would have no option but to revert back to the structure of single company for all vessels, which would expose entire PNSC fleet to commercial and operational risks.
The Ministry of Maritime Affairs requested that since the powers to grant exemption rests with the federal government; therefore, the ECC may grant requisite exemption of 19 subsidiary companies of PNSC from the requirements of the sub rule (3) of rule24 of Public Sector Companies (Corporate Governance) Rules as advised by the SECP, Finance Division.
The ECC also considered and approved summary presented by the Ministry of National Health Services regarding exemption from taxes and duties on import of auto-disable syringes and raw materials/products for local manufacturing of auto disable syringes enabling transformation from conventional to auto disable syringes.
The meeting was attended by Federal Minister for National Food Security & Research Syed Fakhar Imam, Federal Minister for Interior Sheikh Rasheed Ahmed, Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Maritime Affairs Syed Ali Zaidi, Federal Minister for Railways Azam Khan Swati, MOS on Information Farrukh Habib, SAPM on Power and Petroleum Tabish Gauhar, Governor State Bank Dr Reza Baqir, Federal Secretaries, Chairman FBR and other senior officers.
Copyright Business Recorder, 2021