For curtailing imports, the committee, chaired by Prime Minister Shahid Abbasi, approved imposition of RD on new 97 luxury items.
There are another 200 items on which the RD was enhanced in the range of 5 to 15%. The RD was jacked up on all those items on which imports were increasing apace. The RD has been enhanced on those items where imports have witnessed a rampant increase in the recent months.
In the aftermath of ECC approval, now the FBR will issue amendments to the statutory regulatory order (SRO) for bringing the RD on fresh items as well as enhancing its rate on those where it was already
imposed.
The government also approved a package for boosting exports in the range of few billion dollars with the aim to
curtail the trade deficit.
The committee approved a comprehensive package for boosting exports and curtailing imports simultaneously in order to control the yawning trade and current account deficits.
The current account deficit had peaked to $12.2bn during the last fiscal year and it was still on the higher side standing at $2.6bn for the first two months (July and August) 2017.
In the wake of rising increase in trade deficit and current account deficit, the government was left with no option but to make last ditch effort for placing immediate plans to jack up exports and curtail imports in a major way during the remaining months of the current
fiscal year.
In the budget 2017-18, the government imposed RD on 565 non-essential items by various rates ranging from 5% cent to 15, but this RD did not help reduce imports of non-essential items in a big way.
The trade balance remained negative and stood at $6.29b for the first two months (July and August) 2017.
The meeting approved a proposal submitted by the commerce ministry to allocate an additional quantity of 12m kg of surplus tobacco to all the tobacco companies and dealers on pro-rata basis.
The council also approved a proposal to deregulate margins on high-speed diesel for the oil marketing companies (OMC) and dealers under the policy of liberalisation and deregulation. The impact of the policy would be reviewed after three months.
It was also decided that the OMCs would add fuel marker to HSD within six months at depot stage to avoid adulteration. It was decided that Ogra would develop a mechanism to monitor the OMCs commercial stock position, the dealers’ inventory system and Fuel Marker System.
The council also provided a provisional approval of the issuance of government of Pakistan’s sovereign guarantee for Rs39,000m for construction of 2X660MW Jamshoro coal power project, subject to a third part evaluation especially pertaining to the demand and supply
situation.
The council also extended the period of provision of subsidy to agricultural tube-well consumers in Balochistan till December 31 subject to commitment of past payments by all concerned/stakeholders on same terms and conditions as approved earlier by the ECC on June 17, 2015.
The approval is linked with a comprehensive review of solarisation of the tube-wells to be undertaken on a priority basis in order to save electricity bills and the subsidy being provided by the federal and the provincial governments.
The need to put in place efficient irrigation methods likes drip-irrigation was also emphasised. The ECC approved a summary for extending the period of applicability of reduced rate of 0.4% cent advance income tax on banking transactions of non-filers under Section 236P of the Income Tax Ordinance 2001 up to
December 2017.
In order to promote exports, the ECC approved a proposal that 50% of the export package incentive for eligible textile and non-textile sectors, announced in prime minister’s export package, be provided on the same terms as for the period January to June 2017 without condition of increment.
Remaining 50% of the rate of incentive would be provided if the exporter achieves an increase of 10% or more in exports compared to the corresponding period of the last year.
It was also approved that an additional 2% drawback would be provided for export to non-traditional markets. Besides, expeditious settlement of payments claims by the State Bank of Pakistan was also approved.
Various measures for rationalisation of imports and reducing the import bill were also suggested by the Commerce Division and Federal Board of Revenue. The detailed lists of import items would be reviewed and finalised.
