ISLAMABAD: The federal cabinet has directed Finance Ministry to clear dividends owed to Chinese firms operating in Pakistan and to ensure that there was no imposition of taxes in the CPEC Special Economic Zones and in case if any tax was being imposed, it should be withdrawn immediately, well informed sources told Business Recorder.
During discussion on CPEC projects, Ahsan Iqbal Minister for Planning, Development and Special Initiatives, as Chairman of Cabinet Committee on Chinese Investment in Pakistan (CCoCIP), apprised the cabinet that during the meeting with the Chinese counterparts issues relating to security for Chinese nationals in Pakistan, overdue payable amounts of CPEC IPPs, Revolving Account for CPEC IPPs, provision of electricity to Rashakai SEZ, and fiscal incentive package for CPEC SEZs were discussed in first meeting of CCoCIP.
The Chair CCoCIP presented the summary of decisions as taken in the meeting to address the issues. On the issue of “Security of Chinese Nationals in Pakistan,” the CCoCIP directed Interior Division to: (i) continue to take concrete measures so that the confidence of Chinese and other investors can be restored; (ii) adopt a holistic approach to address the security concerns which should include an awareness campaign for the local communities where Chinese nationals are working; and (iii) make SOPs for taking the security measures to instil confidence in measures taken for the security of foreign nationals working in Pakistan. Possibilities should be explored to recruit the security personnel on contract basis instead of recruiting only on permanent basis.
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On the issues of “over-dues of CPEC IPPs and Revolving Account”, the CCoCIP directed the Power Division to comprehensively brief the forum in next meeting of CCoCIP. The dues of CPEC IPPs have touched Rs 500 billion due to CPP-G’s lethargic behaviour.
Board of Investment (BoI) was tasked to conduct a study for the identification of export-based clusters to increase exports up to $100 billion in the next eight years with the input of Commerce Division. Commerce Division will chalk out a clear strategy for export-led growth by taking Petroleum, Industries & Production, National Food Security & Research and IT Divisions on board.
CPEC Secretariat was directed to expeditiously finalise sustainable projects for five corridors namely, corridor of growth, livelihood, innovation, green energy and open & inclusive regional development under CPEC-2, well before the Prime Minister’s visit to China which is expected in 4-6 weeks. All concerned Ministries/ Divisions are to submit their proposals in the form of summaries, on the aforementioned issues, for the CCoCIP in the next meeting in light of rule 18(1) read with rule 23(4) of Rules of Business, 1973.
Taking note of the scenario presented by the Chairman CCoCIP, the cabinet urged the Ministry of Finance and Revenue to clear dividends owed to the Chinese firms operating in Pakistan well ahead of the upcoming meetings with Chinese counterparts to send a positive signal to the Chinese side.
On the issue of Revolving Fund, it was directed that the Power Division, Petroleum Division, Ministry of Finance and Revenue and Ministry of Planning, Development and Special Initiatives shall meet to resolve the issue.
Regarding imposition of minimum taxes in the CPEC Special Economic Zones, the Ministry of Finance and Revenue was directed to take action for withdrawing the same immediately.
After discussion, Ministry of Finance and Revenue was directed to clear dividends owed to Chinese firms operating in Pakistan and to ensure that there was no imposition of taxes in the CPEC Special Economic Zones and in case if any tax was being imposed, it should be withdrawn immediately.
It was also decided that a special meeting of the Federal Ministers of Finance and Revenue, Petroleum, Foreign Affairs, and Planning, Development and Special Initiatives may be held to review the progress on preparations for the upcoming visit of the Prime Minister of Pakistan to China.
Copyright Business Recorder, 2024
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