Special package for textile sector approved by ECC

The Economic Co-ordination Committee (ECC) on Tuesday approved a special package for textile sector having 7.5 percent duty draw back on total import value of PTA used for making polyester. The proposal for duty draw on import of PTA was submitted to the committee for approval by the Textile Ministry.

Sources said ECC, which met here with Prime Minister Syed Yousuf Raza Gilani in the chair, put on hold a summary of the Ministry of Industries and Production for granting an incentive laden-package for Gwadar Export Processing Zone (GEPZ).

It constituted a high level committee, comprising Advisor on Industries and Production Ministry, Manzoor Ahmed Watto and its secretary Shahab Khawaja, Deputy Chairman Planning Commission, Salman Farooqi, Acting Petroleum Secretary G.A. Sabri, Minister or Secretary of the Ministry of Port and Shipping, Federal Board of Revenue (FBR) chairman Ahmed Waqar, ECC directed the committee to come up with a comprehensive plan for covering all economic and industrial zones for availing the incentives to make the package result-oriented.

The committee was informed that Ministry of Port and Shipping has a special economic zone stretching over 900 acres in Gwadar to encourage investment. Likewise, Balochistan government was also in the process to set up an industrial zone in Gwadar for promotion of industrial sector. The committee was also informed that five others industrial and economic zones were being set-up in different parts of the country and they need the same incentives as were being recommended for GEPZ.

The ECC readily accepted the suggestion and asked the committee to come up with a comprehensive uniform plan of incentives for all industrial and exports zones as early as possible.

The proposed incentives package includes 10-year tax holiday for GEPZ. Tax holiday for GEPZ will be applicable to the investors from the date of start of commercial operation of the project, permission for export of production from the zone to tariff area of the country up to 80 percent on the payment of normal duties.

The package also promises normal incentives for exports from GEPZ as available to projects established anywhere in the country shall be applicable to exports from the projects in the zone. As an incentive the plots in GEPZ will be provided to investors on lease (as per existing EPZA procedure) at a reasonable rate to be determined in consultation with the government of Balochistan.

The package also includes zero rated sales tax on supply of construction materials to GEPZ investors or development of zone infrastructure. It also includes exemption from stamp duty and exemption from import policy orders issued from time to time.

Special Secretary Finance, Dr Ashfaque Hasan Khan, gave a detailed presentation to the committee on the economic situation of the country, possible scenario after the international financial crisis and its impact on Pakistan economy. He also briefed the committee on the current account deficit, outflows and inflows by September 15.

The committee was also apprised of the measures taken to overcome financial crisis and the negotiations held with an International Monetary Fund’s (IMF) mission recently. The presentation covered the impact of international credit cards crisis on Pakistan’s economy. Khan also apprised the committee about Economic Monitoring Committee’s (EMC) decisions and their status of implementation.

The Trading Corporation Pakistan (TCP) Chairman briefed the committee on availability of sugar, wheat and urea fertilisers. He informed the committee on the latest status of import of urea from Saudi Arabia. The Utility Store Corporation (USC) Managing Director informed the committee on the steps taken by his department to sell items of daily use on subsidised rates and availability on its outlets.

The committee also reviewed the key indicators of the economy and their performance to support ailing economy. The ECC was apprised that tax collection by FBR has increased by 32.2% in the first two months of the current financial year amounting to Rs 12.2 billion more than the target.

The ECC was also informed that foreign investment has registered an increase of 72% in the first two months of the current financial year amounting to US $645 million. Foreign Direct Investment registered an increase of 64% amounting to US $754 million during the first two months. The ECC constituted a committee headed by Advisor on Industries to review allocation of additional requirements of Natural Gas from Marri Gas Field to Fatima Fertiliser Company.