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The federal government on Friday approved tax exemptions worth Rs20 billion to Punjab government’s pet multibillion-dollar Lahore Orange Line Metro Train Project.
The development took place in a meeting of the Economic Coordination Committee (ECC) of the Cabinet chaired by Finance Minister Ishaq Dar in Islamabad.
In a bid to restrict the cost of Orange Line metro train project to $1.6 billion, the Punjab government had sought Rs20 billion or roughly $195 million as tax exemptions, while citing a similar preferential treatment that is available for the China Pakistan Economic Corridor (CPEC) projects.
The provincial government sought reduction in withholding tax payments and complete exemptions from sales tax and customs duty.
The bulk of the exemptions are on account of indirect taxes and the federal tax authorities have estimated their value close to $195 million or Rs20 billion.
According to a statement issued by ministry of finance, Finance Minister Ishaq Dar chaired the ECC meeting at the Prime Minister’s Office.
The ECC approved the proposal of the Planning, Development and Reform Division at the request of Punjab government to grant exemptions from withholding tax beyond 6% of E&M contract price, and from tax/duties on import of equipment to be installed for the Lahore Orange Line Metro Train Project.
The decision was taken by the Economic Coordination Committee of the Cabinet after the government withdrew FBR’s powers to issue statutory regulatory orders under a condition of the International Monetary Fund.
The committee also decided that a similar dispensation would also be extended to the other rail based mass transit projects in Karachi, Peshawar and Quetta at the appropriate time.
The ECC was apprised that the Lahore Orange Line Metro Train Project has been made a part of the CPEC along with rail based mass transit projects in other provincial capitals at the recently concluded 6th Joint Cooperation Committee meeting held in Beijing, China.
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On DawnNews
Comments (55) Closed
Jan 06, 2017 06:12pm
Good luck
Good move by PMLN
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Jan 06, 2017 06:18pm
Another 20 billions scammed from national kitty and diverted to their personal bank accounts in the name of tax exemption.
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Jan 06, 2017 06:27pm
If companies are local I think it shouldn't be a problem. And I hope the national Highway/Motorway network is finished early, I think the country as a whole will benefit more from that.
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Jan 06, 2017 06:24pm
Good decision
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Jan 06, 2017 06:31pm
Do something for health and education, for goodness sake...people are dying on the floors of the hospitals for lack of beds and proper treatment!!!
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Jan 06, 2017 06:30pm
What a great method of saving cost. I already believed these 2 brothers are genious. Thing to add Dar in this list.
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Jan 06, 2017 06:31pm
Ah, of course. This only applies to Lahore Metro Project. Wonder why!?
I see more Apts and flats in Dubai and London soon!
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Jan 06, 2017 06:36pm
@Harmony-1©
PMLN doesnt want to educate people because it'll get difficult to fool the masses into believing PMLN lies.
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Jan 06, 2017 06:34pm
Pakistani indeed sounds like a very rich country... Just consider the largess of this government, almost on a weekly basis.
Rs 20 billion tax exemption here. Rs 10 billion projects allocated in Punjab last month. Rs. 400 million for Zarb -e -qalam (though I can't find a decent book store or library in the country).
Soon we will be talking about hundreds of billions like the Sheikhs from Qatar and Saudis. Welcome to the land of rich and famous - by all means of corruption.
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Jan 06, 2017 06:38pm
Passenger don't pay for Orange train, Orange train don't pay tax. Free luxurious ride provided by tax payers, in other words. Mostly by those who can't even use it. Same as PIA.
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Jan 06, 2017 06:40pm
Meanwhile, a mother was using a hand ventilator for 48 hrs in Jinnah Hospital to save her child. #Priorities
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Jan 06, 2017 06:42pm
Folks, this is what we can come down to.
US is known for largest Bank robberies in the World, where tellers are held at gun point on almost daily basis across the US. Millions of dollars are stolen everyday around the US through hold ups at convenience stores, gas stations etc...
In Pakistan, on the other hand, you don't need any gun; no need to tie up anyone, no holdups, no hostages and no police to worry about. Just get yourself elected to a public office and you have access to the bank vaults, 24/7, no questions asked. Just announce some projects, and allocate funds to their account. No auditor to check the authenticity of the project or procurement allocations going to legit contractors. Money than flows to your offshore account, and viola! You are a billionaire!
Where did I go wrong with all the sweat blood and tears with Western professional education over 10 years? Heck I am not even a Millionaire!!!
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Jan 06, 2017 06:47pm
This approval should have come through the parliament...
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Jan 06, 2017 06:50pm
They will come up with pickup and drop on helicopters for some schools and then spend billions to support their claims in the name of development. That happens when you elect a "thekedaar" minded person to premiership. Millions and millions are stuck in child-labour and these leaders can't see them along all those metros and rails.
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Jan 06, 2017 06:49pm
@Mahmood Federal Government also approved Karachi Circular Railway, Peshawar Circular Railway and Quetta Circular Railway as part of CPEC and building Metro Bus Green Line in Karachi from its own resources so don't complain.
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Jan 06, 2017 06:51pm
@Skeptic - In the US, at least the robbers get caught and end up in jail. But here never the jail but the plunderers rule over us!
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Jan 06, 2017 06:53pm
Good move, however every account shall be transparent , check & balance needed and public should be informed about the financial situation since it is the Tax money.
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Jan 06, 2017 06:53pm
@Ahmed bin Babar - You are assuming the people in the Parliament are all honest, tax-paying, hard-working folks- who are keeping an eye on the government??
How naive, if you don't think that they could somehow benefit from this project?? Rs 20 billion can shut a lot of mouths, and can also feed a few.
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Jan 06, 2017 06:58pm
Of the 20 Billion exempted...pocket 10 Billion...transfer to Panama!
Fed Govt service charges for negotiating 20 Billion exemption....10 Billion...transfer to Panama.
Okay...all reconciled. No one won...no one lost!
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Jan 06, 2017 07:01pm
The benefit of this exemption only goes to Punjab where as if the tax collected, it will benefit to the whole country.
These Sharifs has always been finding ways to benefit their own politics rather then the whole country.
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Jan 06, 2017 07:01pm
@Truth Then come up with your magical solution instead of pessimism...
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Jan 06, 2017 07:03pm
Over 8o% of Pakistani people are forced to drink contaminated unhealthy drinking water. Even the very Basic healthcare facilities are out of the reach of poor people of Pakistan. The situation in hospitals is Pathetic and worst than ever before, there is no sign of improvement and no development in any sector is visible. That is not the end of serious problems Pakistani nation is facing right now ....and the list goes on ....its 2017 and this is PM nawaz's third term as PM of Pakistan. Pakistani nation has the right to know where the Billions of dollars of US Funds to Pakistan every year actually go ?? Where are they spent??
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Jan 06, 2017 07:08pm
PML-N will make history. They will be the first government to end load shedding and spending massive amounts on other necessary infrastructure projects. Sadly there is no true healthy opposition in Pakistan. Rather than getting engaged in competition of development, PPP and PTI supporters want media attention to do mudslinging. As a result, in this whole process every major institution that has kept the country moving has suffered. Examples of Western countries are often given but nobody learns about their maturity. If Imran Khan were to attack individuals personally in the U.K, he would have been caught in the Court under defamation cases that actually lives and works by rules
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Jan 06, 2017 07:13pm
Hmmm... so next year we may be reading about another offshore company and few more apts in London or Dubai.
And the explanation will probably be the same: 'They belong to my children. I have nothing to do with it.'
We have leaders with Midas Touch. Somehow, their touch only works in London somehow, never in Paksitan.
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Jan 06, 2017 07:20pm
@pak47 Nice fantasy land you must be living in?
Site one example of a decent hospital around the country that this government is responsible for establishing, and I will never vote for Imran Khan?
Shaukat Kahnnum Hospital is not quite Harley Street Clinic, that Imran Khan established in Pakistan. Tell me which hospital has Sharif Family name associated with it and I will nominate you for Noble Prize?
If you are right, than every other critical comment on this forum is wrong and 'mudslinging'? Prove us wrong than!
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Jan 06, 2017 07:44pm
Watch out this space for transportation, legal, train and governance experts
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Jan 06, 2017 07:48pm
@Mahmood - Same is the state of government schools just like the government hospitals.
Remember Central Model School at lower Mall Lahore? It was one of the best and was very tough to get admission there; now it's completely ruined.
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Jan 06, 2017 07:48pm
Could have use 20 billions to upgrade Pak Railway in modern ways. Pak Railway could generate massive output if fixed but these people are using money on cosmetic scheme rather then addressing the root cause.
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Jan 06, 2017 07:54pm
Where are NOTES getting printed?
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Jan 06, 2017 07:56pm
@Mahmood I guess it is not only for Punjab, read the complete Article
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Jan 06, 2017 07:57pm
@BAXAR Poor people use metro and orange
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Jan 06, 2017 08:06pm
@ahmad Frankly I don't give two cents whether it is for Punjab, Kashmir or Sindh... The argument is about sense of priorities.
There are thousands of schools that are in poor state, without good teachers or books. Hospitals, which are in such dire straits, due to lack of power, medicine or staff, that people die on their dirty floors. Transportation (and we all know PIA) that is such shambles that this exemption could be used to improve those. Need I even mention those useless hand-held bomb detectors at the Airports?
The tax exemptions should also be based on ability of each province and tax contribution of each.
Considering that Sharif Brothers are notoriously rich and pay the least amount of tax (I paid several times more last year than they did) it does't take Einstein to see where the convoluted priorities lie. If you think, none of this has to do with personal enrichment and to garner votes for next elections, than I must be reading the wrong paper.
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Jan 06, 2017 08:14pm
tax exemption for whom?? the suppliers of iron (sarya) and other equipment ?? Mr Nawaz.. no offence but i would consider it a good move if under nepotism the material contracts are not assigned. nepotism is default configuration of our politicians blood stream. very less can evade that :). secondly any one can start such projects with control over billions. start something which will really benefit country.such as an extensive campaign at war footing for plantation involving each and every citizen of this country. why islamabad is considered as beautiful?? because it is green.
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Jan 06, 2017 08:13pm
No negative comments for sharifs, both are above board.
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Jan 06, 2017 08:19pm
who will benefit? contractors or government? isn't this a fixed price contract in which price would have factored in these taxes?
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Jan 06, 2017 08:19pm
Rs 20bn tax exemptions for a project in Takht-e-Lahore, as if already existing Blue Line (appropriately known as Jungla Bus ). was not enough.
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Jan 06, 2017 08:15pm
Another example of massive corruption in the name of tax exemption. We cannot afford to have this corrupt to the core PML-N government leading our country anymore. We are on verge of bankruptcy for God sake.
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Jan 06, 2017 08:18pm
@Harmony-1© : May be the cut/commission in schools, hospitals is not the same as orange train and motorways. Corruption is destroying our country.
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Jan 06, 2017 08:26pm
In every country of the world public transport is supported by the government and these are non profit schemes, I have traveled all over Europe and found these public transports subsidised by their Governments you name it England, Holland, Norway
even Poland Hungary, Romania, So should be in Pakistan where the people are poor and have to travel to and from their work. Very good move for and by Pakistan Government to exempt this tax on Orange Line Metro.
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Jan 06, 2017 08:30pm
So most tax taken from karachi
We got no roads no waist removal and our provisional government is least bothered with other utilities
And my tax is subsidising lahore orange line
Qudos....
I need my karachi province
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Jan 06, 2017 08:34pm
It is surprising to note positive reaction by some people here as this exemption is direct loss to government revenue which is already dwindling. Also being a Cpec project now, all tools and machinery will be imported from China with repayment of loans.It would be better if this tax is utilized on education and health, rather benefiting corrupts and white elephant projects
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Jan 06, 2017 08:36pm
It is surprising to note positive reaction by some people here as this exemption is direct loss to government revenue which is already dwindling. Also being a Cpec project now, all tools and machinery will be imported from China with repayment of loans.It would be better if this tax is utilized on education and health, rather benefiting corrupts and white elephant projects
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Jan 06, 2017 08:38pm
@farjee : I agree. Urban Sindh has the right to have a separate province. We need more administrative units in the entire country.
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Jan 06, 2017 08:42pm
@farjee ...Altaf Bhai took all the money and destroyed Karachi, I myself migrated from Karachi to Lahore the people welcomed me and became my good friends.
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Jan 06, 2017 08:51pm
Then people complain about the cynicism about the intentions of the govt its clearly an example of favoritism towards the involved parties...
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Jan 06, 2017 08:52pm
Go on spending spree but look back national debt amounting to $78 Billion might be catching on you.
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Jan 06, 2017 08:55pm
Yes slowly and surely burn the whole ship down.
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Jan 06, 2017 09:36pm
Haters gonna hate. Ignore them. Good job Punjab Govt!
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Jan 06, 2017 10:17pm
I am blown away by this government and the Punjab government, which are really two sides to the same coin, how they are so hellbent on spending billions of dollars on these metro bus projects, should the government be focusing more on the drinking water issue? Convenience versus health, what should be more important? The government takes a step forward in increasing tax revenue, than takes two steps back. Should the government allow the public to vote on what should be done first?
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Jan 06, 2017 11:39pm
Rs127 billion short fall in tax collections and another rs20 billion short fall. Good move. No wonder people are fleeing from this country. Nothing will change. CPEC will disable this country if this continues. Our people have pinned their hope on this project believing things will be different but nothing will change because for 60+ years we are being led by crooks.
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Jan 07, 2017 01:24am
Does it mean cost of project will go down by Rs 20 billion?
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Jan 07, 2017 03:00am
PML-N government need spend this money on Healthcare not on luxury, they need to build hospitals to safe lives of poors,Nawaz Sharif and other politicians can effort to go London for treatment.
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Jan 07, 2017 03:41am
No one trusts the government. Everyone is thinking how much the sharif family is going to be pocketing .
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Jan 07, 2017 05:00am
Loot sale of public money for mega corruption. Good job PMLN and PPP. The biggest enemy of Pakistan = Corruption of PPP/PMLN.
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Jan 07, 2017 08:25am
@isb Its shame that we downgrade our own country development projects. we should appreciate any good work done by any government.
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