Amendments made to get OECD membership: Dar

Finance Minister Ishaq Dar has that government has incorporated amendments in the Finance Bill 2016 to qualify for the membership of the Organisation for Economic Cooperation and Development (OECD) and subsequent sharing of information from member countries about banking accounts of Pakistanis.

While briefing National Assembly’s Standing Committee on Finance chaired by Qaiser Ahmad Sheikh, Finance Minister said as the Organisation of Economic Cooperation and Development”s (OECD) requirement have been met, now it would not be difficult for Pakistan to become its member.

There are 34 members of the OECD, he said, adding that Secretary General of the organisation has assured Pakistan in writing that if required amendments are made, Pakistan would surely qualify for membership.

The Minister also briefed the committee about ongoing discussions on a Pakistan-Switzerland tax agreement with respect to exchange of information on banking.

He said that a meeting with Swiss authorities is also scheduled on June 23-24 and added that once Pakistan becomes member of the OECD, this would be more helpful in sharing of information.

The Minister said the recommendations of the committee regarding budget would be considered on top priority.

The Committee also unanimously approved the Public Private Partnership Authority Bill, 2016 after it was informed that in order to bridge the gap in the development of infrastructure projects the use of public private partnership (PPPs) is likely to become widespread in Pakistan.

The meeting was further informed that the federal government has so far been modest in utilising the PPP model in infrastructure investments.

However with an expected surge in PPP-financed projects, the situation is expected to change in the near future as the present government embarks on an ambitious programme of large-scale investment projects.

The Planning and Development Division has announced an overall development strategy (“Vision 2025), which promotes private sector-led growth as one of its pillars.

In view of above, Pakistan needs to develop a robust framework to ensure sound practices in evaluation, prioritisation, and implementation of PPPs, and an improvement in the management of potential fiscal costs and risks associated with PPP projects.

This act will provide a regulatory framework to execute Public Private Partnerships in Pakistan so as to promote domestic and foreign private investment to increase availability of public infrastructure, set up transparent and efficient institutional arrangements for PPPs, and promote private sector participation in the economic development, among others, through a transparent and fair procurement process.

Pakistan Dairy Association”s representatives informed the Committee about the proposal in the Budget 2016-17 to move the dairy and milk products from zero-rated regime to sales tax exemption.

They were of the view that the said proposal will have a negative impact on the dairy sector, farmers and consumers.

The Committee recommended that zero-rated regime for dairy and milk products should be continued.

The Committee considered the anomaly in fixing of customs duty slab of pathetic anhydride, H.S. Code No 2917.3500 and unanimously recommended that customs duty should be reduced from 16 percent to 11 percent to ensure a level-playing field.

The Committee recommended that Pakistan Agricultural Machinery and Implements Manufacturers Association should be given sales tax exemption on manufacturing of agricultural machinery and implements.

The committee recommended that rice export should be considered zero rating, and sales tax exemption should also be provided on import of machinery.

The Committee also considered the issue of cement industry. The committee also recommended that stationery items should be covered by zero-rated regime.

The committee adopted the report of the sub-committee and recommended that same may be sent to Federal Board Revenue (FBR) for necessary action as unanimously agreed.

Meeting was attended by Saeed Ahmed Khan Manais, Rana Shamim Ahmed Khan, Muhammad Pervaiz Malik, Sardar Muhammad Jaffar Khan Leghari, Sheikh Fayyaz-ud-Din, Mian Abdul Mannan, Ms Sham Fatima Khawaja, Ms Leila Khan, Dr Nafisa Shah, Syed Mustafa Mehmud, Jehangir Khan Tarin, MNAs. –Business Recorder