For improving its financial health: 5 regulatory bodies ordered to pay 3% fee, charges to CCP

December 02, 2020

ISLAMABAD: The government has notified through Statutory Regulatory Order for binding five regulatory authorities to pay three percent fee and charges for providing financial support to Competition...

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ISLAMABAD: The government has notified through Statutory Regulatory Order (SRO) for binding five regulatory authorities to pay three percent fee and charges for providing financial support to Competition Commission of Pakistan (CCP) from financial year 2009-10 and onwards.

This much-awaited resolution of outstanding issue will enable CCP to ensure revenue streams envisaged under the competition law after passage of almost one decade.

According to SRO issued by the finance ministry on November 27, 2020, the federal government in consultation with the CCP will prescribe a charge of three percent on the fee and charges levied by the following authorities from the financial year 2009-10 and onwards to meet the charges in connection with functioning of the Commission; namely Security and Exchange Commission of Pakistan (SECP), National Electric Power Regulatory Authority (Nepra), Oil and Gas Regulatory Authority (Ogra), Pakistan Telecommunication Authority (PTA) and Pakistan Electronic Media Regulatory Authority (Pemra).

The CCP made an announcement Tuesday and said the federal cabinet, in its meeting on November 24, 2020, showed its unequivocal support to the CCP by approving the issuance of a Statutory Regulatory Order (SRO), prescribing 3% of fee and charges levied on SECP, Ogra, PTA, Nepra and Pemra from the financial year 2009-10 and onwards to meet charges in connection with the functioning of the CCP. Accordingly, the finance ministry has issued the SRO on November 27, 2020 for gazette notification.

Necessary action has also been requested including standing instructions to their bankers for transfer of the prescribed percentage of their total fee and charges collected during each quarter, for credit to the account of the Commission, by the 10th of month following the relevant quarter and before surrendering the surplus to the Federal Consolidated Fund, under intimation to the Commission.

The Commission duly acknowledges the support and efforts of the finance ministry and also the law ministry in the entire process and views it as a stepping stone towards making the Competition Commission of Pakistan (CCP) a truly independent and robust organisation. It also speaks about the commitment of the federal government by resolving the decade-old issue of payment of the said funding, thus providing due support in making CCP a sustainable and more effective organisation.

On December 23, 2008, the federal government named the five regulatory bodies and fixed 3% of fee and charges levied on them as the amount to form part of the CCP fund. Despite numerous correspondence with all those involved, full support of the finance ministry, favourable opinions of the Law & Justice Division, objections of the Auditor General of Pakistan on the chosen regulators for non-payment, and the support of the Senate’s Standing Committee on Finance and Revenue and strong recommendations from Public Accounts Committee on numerous occasions, the Commission was not able to tap into this source of envisaged funding. Since its inception, the Commission had been operating under severe resource constraints with a fixed annual grant.

All penalties the Commission imposes are deposited in the Federal Consolidated Fund, thus the Commission is also shielded from any conflict of interest, perceived or real, as the quantum of penalties Commission imposes are not to be used for its operational budget. The Commission is hopeful that the five regulatory bodies would now be supportive and play their due role in strengthening the competition regime in Pakistan.

This three percent source of funding is appropriate and necessary, given the circumstances of the Commission. A multi-source budget with multi-year funding arrangements, updated annually, will contribute to the independence of the Commission allowing it to plan its work without uncertainty about the future.

The chairperson of Competition Commission of Pakistan said the government’s commitment to strengthening institutions hinges upon affording institutions administrative and financial autonomy. Resolution of long pending matter will certainly enable the Commission to pursue its legislative mandate more effectively and will also pave way for organisational reforms.

Pakistan needs an economic landscape to allow consumers to benefit from competition that aims at inter-alia reduced prices, improved quality, efficiency and innovation. Once these funds are received and continue to be contributed, a financially autonomous Commission can help further the economic agenda of the government more effectively.

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