ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has given a week to the Federal Board of Revenue (FBR) to come up with the details regarding the tax evasion in the sugar sector.

The sector’s financials have been under spotlight over lack of clarity in the tax collection from the sugar millers — widely dubbed as the political crop of Pakistan.

The ECC also allowed import of 50,000 tonnes of urea fertiliser following a proposal from the Ministry of National Food Security and Research (MNFS&R). The committee authorised Adviser to the Prime Minister on Commerce and Industries Abdul Razak Dawood to allow additional import of 50,000 tonnes of urea, if required.

Furthermore, the committee also allowed fertiliser plants to be fully operational during rabi season in order to ensure adequate urea production. The ECC maintained that no undue increase in prices of urea will be tolerated on the pretext of increase in gas prices.

FBR given week’s time to provide details on tax-evaders in sugar industry

Finance Minister Asad Umar, who chaired the ECC meeting on Wednesday, asked FBR Chairman Jehanzeb Khan to place the matter before cabinet after consultations with relevant stakeholders. The FBR chairman briefed the meeting on the status of tax collection from sugar industry and suggested a revised mechanism to ensure better recovery.

“We are reviewing various proposals regarding taxing the sugar industry,” a senior tax official informed the meeting.

The tax official lamented that there is hardly any accurate data on actual production of cane and its by-products. He said millers also produce molasses and ethanol from cane.

He added that FBR does not have a mechanism in place to monitor these products to determine the actual quantum of tax.

The committee also decided to maintain wheat support price at Rs1,300 per 40 kg after a proposal was submitted by the MNFS&R. It was noted that the wheat prices in the international market were considerably lower and the government, in order to protect farmers is incurring huge expenditure in procurement process.

The ECC also approved disbursement of Rs367 million — September’s salary — to Pakistan Steel Mill (PSM) employees and directed the Ministry of Industries to distribute outstanding dues to widows of PSM’s deceased employees. The Ministry of Industries and Production was also directed to submit a detailed proposal to revive PSM as it was removed from the privatisation list.

The committee approved a proposal to double Pakistan’s share of wheat for the South Asian Association of Regional Countries (Saarc) Food Bank Reserve from 40,000 tonnes to 80,000 tonnes, adjusting it in the existing quantum of one million metric tonnes of national strategic reserves assigned to Pakistan Agricultural Storage and Services Corporation.

During the meeting, Power Division was directed to actively engage with companies to facilitate clearance of Pakistan State Oil’s outstanding receivables — Rs300bn — as early as possible to guard against risk of disruption in supply chain of petroleum products.

Published in Dawn, November 8th, 2018