- Executive Committee directs financial plan be prepared to introduce industrial tariffs based on cost of service to tackle issue of cross subsidy for domestic users
ISLAMABAD: The Executive Committee of Special Investment Facilitation Council (SIFC) has directed that a financial plan be prepared to introduce industrial tariffs based on cost of service to tackle the issue of cross subsidy for domestic users, which is eroding competitiveness, sources close to caretaker Finance Minister told Business Recorder.
Secretary Commerce, Secretary Finance and Secretary Power have been directed to devise a mechanism to reduce the cost of electricity involving: (i) implementation of wheeling at cost of 1 cent per unit; and (ii) formulation of a committee on capacity charges and debt restructuring of power sector.
Secretary Petroleum and Secretary Commerce have been assigned the responsibility to provide a timeline to the Executive Committee for implementation of WACOG to substitute differential gas tariffs which leads to market distortion.
Both Secretaries have also been directed to evaluate, in financial terms, the overall impact and requirements for according priority of gas supply to export sector.
Secretary Petroleum has been directed to prepare a “merit order” for provision of domestic gas for power generation, industry, commercial and household users, keeping in view the maximum economic benefits and return. Proposal to stop further expansion of pipe network and promotion of alternate household fuels, such as solar, biomass, LPG and storage of LNG to be presented in Executive Committee.
Secretary Finance, Governor SBP, Secretary Commerce and Secretary Petroleum have been directed to identify impediments in progress on the following items to reduce the impact of dollar volatility on the economy: (i) settlement in PKR for imports and exports as per SBP manual; (ii) settlements in RMB; (iii) settlements through Asian Clearing Union (ACU); (iv) cash over counter facility- to be restored; (v) transit through Iran/ Afghanistan- resolve issues of banking clearance; (vi) banking transaction to be monitored and discourage hoarding of US dollars and; (vii) barter trade mechanism to be operationalised.
Secretary Commerce and Secretary Finance will propose a financially viable mechanism in the next Executive Committee meeting to enhance coverage of Export Facilitation Scheme (EFS) at all the stages, covering the entire value chain, while considering the current phase of financial austerity under the IMF regime.
Revival plan of EXIM Bank and its prospects in contributing to financial strengthening of the economy will be presented in the forthcoming meeting of the Executive Committee.
Secretary Commerce, Secretary Industries, Secretary Finance, Secretary Board of Investment and Governor SBP have been directed to devise a plan for further rationalization of 6500 import tariff lines including reduction of tariffs to zero percent on import of 2,212 tariff lines of raw materials/ intermediates in the light of IMF commitments, revenue targets/ implications and wider industrial policy concerns.
Secretary Commerce and Chairman FBR will propose a mechanism for curbing smuggling of following identified smuggling-prone items including the financial impact for adopting such a mechanism: (i) fabric of all sorts (respective all headings); (ii) machinery (chapter 84 & 85); (iii) tyres (PCT 40;11); and (iv) black tea (0902.3000-4090).
Secretary Commerce, Secretary Finance and Chairman Secretary Commerce have been asked to examine the impact and viability of imposition of processing fee @ 10 ad valorem against each consignment of above smuggling-prone items.
They have been directed to evaluate the viability and requisite instruments for substituting insurance guarantee with bank guarantee for each consignment which is released after uploading of T-1 form in WeBoc for transit trade.
The three secretaries have also been asked to develop a plan including financial benefit of enhancing existing threshold of: (i) 20 per cent to 25 per cent scanning of all ATT consignments at port of entry and port of exit (border stations) and; (ii) 5 per cent to 10 per cent for examination of all ATT consignments at port of entry and port of exit (border stations).
Commerce Ministry and Foreign Affairs Ministry have been directed to review Afghanistan-Pakistan Transit Trade Agreement (APTTA) to counter smuggling of goods and report progress to the Executive Committee of SIFC on new APTTA negotiations which are underway. And Secretary Commerce has been directed to notify Committee on Afghan Transit Trade.
Copyright Business Recorder, 2023