Thursday February 29, 2024

ECC approves incentives worth Rs9.6bln to propel remittances

March 05, 2020

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved Rs9.6 billion worth of incentives for banks, foreign exchange companies and remitters to fuel fast pace of remittances in the remaining months of the current fiscal year.

The ECC approved the technical supplementary grant to finance a host of measures during the current fiscal year to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.

Remittances scaled up 12 percent to $14.3 billion in the first eight months of the current fiscal year. The meeting, presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh, further constituted a committee to discuss a proposal of quarterly adjustments of K-Electric. The committee approved a proposal to revise up the rebate of reimbursement of telegraphic transfer charges transactions between $100 and $200.

The scheme, which launched in 2018/19 to incentivise banks and exchange companies for growth in foreign inflows, would continue. Under the scheme, financial institutions would be incentivised Re0.50/$1 on five percent growth, Re0.75/$1 on 10 percent growth and Re1/$1 on 15 percent growth.

Likewise, remittances transferred into bank accounts would be exempted from withholding tax with effect from July 1, 2020. The meeting was told about the launch of a national remittance loyalty program from September 1, 2020 to provide various incentives to remitters through mobile apps and cards. The program would be with collaboration of banks and government agencies.

The ECC further approved allocation of gas to Sui Southern Gas Company and provisional tight gas incentive for Rehman-4 well in Kirthar block, subject to the finalisation and approval of requisite third-party certifications for tight gas for the same well.

The committee discussed a proposal regarding quarterly adjustments of the K-Electric Limited for the period from July 2016 to March 2019 and set up a committee, comprising Energy Minister Omar Ayub Khan, Economic Affairs Minister Hammad Azhar, Deputy Chairman Planning Commission, secretary finance and a representative from the K-Electric to examine the issue in detail and recommend to ECC within a week a solution and roadmap for resolving the issue.

The ECC extended, till June 2020, the grant of subsidy to agricultural tubewell consumers in Balochistan. The meeting was told that nearly 30,000 agriculture consumers inBalochistan had been given subsidy since January 2015 with 40 percent of the burden of subsidy born by the government and the remaining 60 percent picked up the Balochistan government.

“However, the recovery of dues from the farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful,” an official statement said.

The ECC set up a committee to discuss the issue with the government of Balochistan to ensure a credible solution to the problems, impeding a judicious execution of the scheme for which the federal government alone was contributing Rs9 billion annually, and also allowed the extension of subsidy until a solution to the issue was found by the committee and put in place.

The ECC asked the ministry of industries and production to resubmit the proposal for revival of a direct reduced iron unit of Tuwairqi Steel Mills Limited, a part of Saudi-based private Al-Tuwairqi Holdings.

The ECC approved a technical supplementary grant of Rs5 billion in favour of the Higher

Education Commission for the current fiscal year with instruction for a judicious and need-based distribution of funds among the universities.

The ECC also approved a proposal by the national security division for a technical supplementary grant amounting to Rs15 million for the strategic policy planning cell created in the national security division with the approval of the Prime Minister to act as an intellectual hub for evidence-based policy input on key national security issues.

The committee further okayed a proposal for a technical supplementary grant amounting to Rs34.528 million for internal security duty allowance to the Pakistan Air Force.