7-year tax holiday for relocating used oil refineries:ECC

[LahoreEstate]

By Sajid Chaudhry

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet here on Thursday allowed seven years tax holiday with other incentives for investors desirous of relocating used oil refineries in Pakistan.

The ECC met under the chairmanship of Adviser to PM on Finance and Economic Affairs, Shaukat Tarin at the Prime Minister’s Secretariat.

ECC approved Ministry of Petroleum and Natural Resources summary for provision of incentives for relocation of old oil refineries to be set up in Pakistan with provision for seven years tax holiday plus other incentive package. This incentive package has been subjected to application of admissible regulations, emphasizing that the said relocated/refurnished oil refineries shall undertake necessary infrastructure investment/facilitation for the socio-economic boost of Balochistan Province.

While reviewing Ministry of Communication summary proposing leasing of right of way (ROW) by National Highways Authority according to an approved leasing policy ECC directed the communication division to revisit the draft leasing policy, and constituted a committee comprising ministers for information, privatisation and representatives of communication division to technically and commercially examine the proposal and resubmit its recommendations to ECC for approval.

ECC deliberated on Ministry of Petroleum’s summary seeking extension in Uch gas field development and production lease earlier granted to OGDCL for a period of 25 years, and approved Uch-II expansion project for commitment of gas supply for 25 years from the start-up date. ECC considered Ministry of Water and Power proposal for power transmission enhancement multi tranche facility project, based on an earlier signed GOP-ADB agreement of 20th May 2008, seeking financing for a power transmission enhancement investment programme and approved ADB loans re-lending proposal to NTDC at an interest rate of 12.0 percent, including exchange risk coverage.

ECC allowed Ministry of Finance proposal for equity-based investment abroad by resident Pakistanis comprising a request of M/s Educational Services Pvt Limited (ESL) to remit an amount of $17.5 million to its wholly-owned UK based subsidiary. ECC approved Ministry of Food and Agriculture proposal seeking GOP collaboration with M/s Monsanto USA in Bt Cotton technology transfer along with an action plan mutually agreed by all stakeholders. It allowed MINFAL to enter into Agreement/MOU with M/s Monsanto for implementation of a collaboration-based action plan that would lead to Bt cotton technology transfer

Key Economic Indicators: ECC reviewed Key Economic Indicators (KEI) and overall price situation in the country and noted that overall Consumer Price Index (CPI-based) inflation has registered a deceleration of 0.4 percent during July 2008-February 2009 over last month. ECC further noted that forex reserves as on 16 March 2009 stood at $ 10.2 billion that included impact of IMF’s first tranche of disbursement and other positive inflows. It noted that inflationary pressures are likely to ease in next few months owing to sharp decline in commodity prices particularly POL and palm oil.

ECC was informed that as on 8 March, 2009 domestic wheat stock stood at 1.051 million tonnes, showing higher stock of about 0.422 million tonnes compared with last year. The government has decided to import 2.5 million tonnes of wheat in phases this year to augment domestic wheat supplies. Out of 2.5 million tonnes, TCP so far has imported 2.039 million tonnes of wheat. ECC directed TCP to complete provision of required wheat stock to Sindh Province to meet any shortfall. It noted that existing sugar stock was reported to be around 2.553 million tonnes to supplement open market needs.

ECC expressed satisfaction over current account balance recording a surplus of $ 169 million in February 2009, which is a tremendous improvement upon an earlier deficit in October 2008.

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