The Economic Coordination Committee (ECC) of the cabinet on Friday exempted all levies and taxes on the Japan funded Islamabad – Burhan Transmission Line Project and approved sovereign guarantee for a loan of $ 140 million for Dassu Hydel Power Project.
An official source said, after giving unprecedented tax concessions to the Chinese, the government has come under immense pressure from other donor countries to grant similar concessions to their companies working on various development projects in the country.
The government, he said, is bound to give similar tax concessions to the development projects carried out with the assistance of friendly countries and donor agencies. It will significantly impact the revenue collection in the current and coming years, considering the number foreign-funded development projects, as well as tax evasion by the local companies, he added.
An official statement said that the ECC meeting, chaired by Finance Minister Ishaq Dar, approved the proposal of Economic Affairs Division (EAD) for grant of exemption to Japan International Cooperation Agency (JICA) from all levies and taxes for the loan extended by the Government of Japan on concessionary terms, amounting to $ 26 million for the Islamabad – Burhan Transmission Line Reinforcement Project.
The main objective of the project is to improve the reliability of the national grid and to meet the growing demand for electricity transmission through reinforcement of transmission lines necessary for power supply to Islamabad and its surrounding areas, thereby contributing to the improvement of the economic infrastructure of Pakistan.
The ECC also approved the draft of the standard Power Purchase Agreement (PPA), proposed by the ministry of water and power, which will be used as the standard template for future PPAs. The draft PPA is a tripartite agreement between Central Power Purchasing Agency, Guarantee Ltd (CPPA) on behalf of ex-WAPDA Distribution Companies, National Transmission and Despatch Company Limited (NTDCL) and the power producers.
The meeting also approved the request of the ministry of industries to reduce the price of imported urea fertiliser lying with National Fertiliser Marketing Limited (NFML) to Rs 1,000/- per 50 kg bag in the interest of public during Kharif 2017.
