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January 21, 2021

ECC allows 800,000 tons of sugar import

Business

January 21, 2021

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet on Wednesday allowed private and public sectors to import 800,000 tons of sugar to bring down its prices and build up carryover stocks.

The ECC also allowed import of 300,000 tons of wheat to create strategic reserves before the arrival of the next crop in the coming April/May period.

The private sector has been allowed to import 300,000 tons of sugar at reduced rate of withholding tax from 5.5 percent to 0.25 percent. The Trading Corporation of Pakistan (TCP) will import 500,000 metric tons sugar at reduced withholding tax rate while 17 percent sales tax has also been abolished. The government wants to procure sugar within the domain of the public sector as it is trying to possess more sweeteners at cheaper rates available in its stocks before next Ramadan.

During the ECC meeting, one participant said the availability of sugar will become clearer in March/April 2021 so the government might have to come up with revised estimates for allowing sugar import through the private sector. If sufficient stocks become available then the incentives provided to the private sector may be withdrawn. It all depends on the availability of stocks available at the end of crushing season. The private sector has been allowed to import 300,000 tons of sugar till June 30, 2021.

The ministry of food security and research presented a summary to authorise TCP to make immediate arrangements for import of 300,000 tons of wheat through a tendering process as ratified by the cabinet and nominate Pakistan Agricultural Storage and Services Corporation (Passco) as a recipient agency for the imported wheat to replenish its stock as needed.

ECC accorded approval and also approved another summary by the food security ministry regarding allocation of 60,000 tons of wheat for Food Department, Balochistan from Passco’s existing stock on the subsidised rate as per previous practice.

The ECC again deferred the draft of textiles and apparel policy 2020-25 because the concerned stakeholders could not evolve consensus.

According to an official announcement, Minister for Finance and Revenue Hafeez Shaikh chaired the meeting of the ECC.

Ministry of Industries and Production presented a summary before ECC for import of sugar to reduce upward pressure on prices of sugar and to buffer up carryover stocks before the arrival of the fresh crop. The ECC approved reduction of withholding income tax on commercial import of white sugar and raw sugar that will incentivise the sugar mills for import of 300,000 tons raw sugar up to 30th June, 2021.

Ministry of Religious Affairs and Interfaith Harmony presented a summary for scaling up of ‘road to Makkah pilot project’ from Islamabad airport to Karachi and Lahore to facilitate Hujjaj for performing Hajj under the government scheme. One of the pre-conditions was grant of special exemption on the import of technical equipment by Saudi Arabia. ECC said FBR will hold a separate consultation with the Ministry of religious affairs to work out details and matter would be placed before next ECC for approval.

ECC also approved a draft policy on equity investment abroad by residents / firms, which caters to the needs of the business community and aims to improve the ease of doing business, promote exports, facilitate resident companies in raising capital from abroad. It will also fulfill legitimate investment needs of the individuals.

It was decided that gas rate of Rs772/million metric British thermal unit will be applicable to Agritech and Fatima Fertilizer post November 2020 till January 2021 as requested by the ministry of industries and production.

ECC approved exemption of sales tax and additional sales tax of three percent on the import of 52 fire fighting vehicles by Sindh Infrastructure Development Company Limited.

Ministry of Communications updated ECC regarding progress made in conversion of National Highway Authority (NHA) loans into government loans as per last ECC held in December last. NHA requested for a time period of nine months to prepare a commercially viable business plan in consultation with other Ministries. NHA’s debt restructuring would be linked with the outcome of the said business plan. It was decided that outstanding mark-up accrued till date will be capitalised as on 30 June, 2020. There will be a moratorium on further accrual of mark-up till the finalisation of the business plan.