The Senate Functional Committee on Problems of Less Developed Areas Thursday recommended that Utility Stores Corporation (USC) be exempted from tax, observing that it is crucial for the welfare organisation to operate.
The parliamentary panel met with Usman Khan Kakar in the chair here on Thursday where Managing Director (MD) USC Omar Lodhi revealed that taxes, Public Procurement Regulatory Authority (PPRA) rules and the trend of hiring daily-wage labourers are weighing on the Corporation.
The committee met to deliberate upon the performance and challenges of the organisation. The committee observed that tax exemption is crucial for USC to operate as a welfare organisation.
Managing Director USC Omar Lodhi informed the committee that the organisation is paying taxes worth Rs 6 billion to the Federal Board of Revenue (FBR) per annum which is causing the organisation a bottom line negative of Rs 7 billion.
He said that the issues that weigh the organisation down are taxes and the PPRA rules that compel it to go for the lowest possible bidder. The trend of hiring daily-wage labourer is another issue that is a negative for the organisation, making it impossible to crack down on corruption and hoarding.
While discussing the implementation of recommendation made during the previous meetings, the committee chairman inquired about the status of setting up mobile outlets in remote areas such as Chitral, Musa Khel, Sorab, Awaran, Kachi, Bolan, Mastung, Achakzai, Toba, Kakri, Qamadin and Karez.
The managing director USC informed the committee that setting up mobile stores at this point would cause a further crunch on the budget, which is barely enough to pay salaries.
He said that organisation would be in a position to begin this endeavour in a few months.
The committee urged the organisation to set up more stores in the less developed areas, especially in districts Musa Khel and Sherani. The managing director USC assured the committee that the USC seeks expansion and will open up a new store in Musa Khel within four months.
The committee was informed that the criteria being followed for expansion are population of an area and distance from already established outlet.
The committee recommended that to ensure that the USC fulfils its purpose, it is crucial that system is in place. It was recommended that Federal Board of Revenue (FBR) and PPRA be summoned on the next meeting so that more details about the USC tax may be procured.
It also suggested that the number of utility stores be increased in the less developed areas especially in remote areas of Punjab. The committee directed the USC that the contractual employees be regularised and the recruitment process that has been pending for the last five to six years be completed.
It also stressed the need for a computerised system to be developed throughout the country so that the USC records for inventory, stocks, sales and purchase of products may be maintained to ensure checks and balances and eradicate corruption.
Chaired by Senator Usman Khan Kakar, the meeting was attended by Senators Kulsoom Parveen, Sardar Muhammad Shafiq Tareen and Gianchand, as well as the senior officers of the Ministry for Industries and Productions and Utility Stores Corporation.
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