ISLAMABAD, May 19: The government has decided to bring mineral sector on a par with oil and gas sector to facilitate large investments with effect from forthcoming fiscal year by granting it a number of tax incentives.
Official documents of the petroleum ministry suggest that objective was to rationalize the concessions during mineral exploration, mine development and commercial production phases. The Economic Coordination Committee (ECC) of the cabinet would formally approve the incentive package on Thursday, officials said.
SCOPE OF IMPORTS: Under the new concessions, the scope of mineral imports would include all machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables which are not manufactured locally and are required for use by mineral exploration and production companies or their contractors during one of the successive exploration phase, mine construction phase and commercial production phase, all related to one concession area.
Besides, used machinery, equipment, accessories and components could also be imported on temporary basis for export after use. Requirement of import and the status of operational phase i.e exploration, mine construction, commercial production, to be certified by the mineral wing of the petroleum ministry.
EXPLORATION PHASE: There will be an exemption of whole of customs duty and sales tax during the exploration phase. Indemnity bond to cover the exempted dues to be filed by the company with the customs authorities which would be discharged on export of the imported goods or on production of certificate of its consumption or loss in use from the mineral wing of the petroleum ministry or its local disposal as per approved procedure of the customs authorities or on obtaining certificate of installation from customs authorities.
In case the mining project is declared by the government to be an export processing zone, whole of customs duty and sales tax shall stand exempted without any requirement of indemnity bond to cover the exempted duties and taxes.
