ISLAMABAD, July 2: Tax collection in 2003-04 was Rs514 billion, which is Rs4 billion higher than the budgetary target. The final tax collection figure is expected to be Rs515 billion.

This was stated at the ECC meeting, which was presided over by Finance Minister Shaukat Aziz. The ECC also approved the plan for distribution of wheat to the provinces besides the modalities for imports.

The Trading Corporation of Pakistan (TCP) was directed to float international tenders on Monday for the import of 0.5 million tons first tranche out of a total one million tons of wheat the government intended to import for buffer stock.

As already decided by the Prime Minister, TCP would be responsible for the import of wheat that would be kept as a buffer stock as well as to stabilize the atta prices. The TCP would carry out the operation in coordination with Minfal.

The entire process would be completed by the end of year 2004, through 3-4 tenders. The TCP has been instructed to issue tenders for the purchase of 500,000 tons of wheat on Monday. The meeting also decided that priority would be given to Pakistan Railways for transportation of wheat to various provinces.

In case of any dispute the minister's committee on wheat would take a decision and submit it to the ECC for approval. The meeting decided that only the internationally based suppliers of wheat would be eligible for participating in the tender.

The TCP would appoint internationally known and recognized pre-shipment inspection (PSI) agencies to avoid quality disputes as happened in case of Australian wheat recently. The PSI agency would be responsible for the integrity of sample.

The sample drawn by the PSI agency at the load port would be tested by laboratories in Pakistan to be identified and nominated by Minfal before shipment takes place and its results would be final.

The ECC also reduced the deemed price of several phosphatic and potash fertilisers so as to reduce fertilizer prices. The governor, State Bank of Pakistan, informed the meeting that foreign exchange reserves of the country were at $12.3 billion now despite decrease in foreign exchange payments and increase in oil price payments.

He said the import growth this year is 24 per cent higher over the last year. Secretary Minfal informed themeeting that China had now allowed export of mangoes from Pakistan which would increase country's exports.

Commerce minister Humayun Akhtar informed the meeting that apple and date treatment plants in Quetta and Turbat had been restored and they were functioning properly.

In this contextECC in principal agreed to facilitate tomato paste production in Dhadhar, Balochistan. Privatization Commission would set up a plant for the purpose in the private sector through an advertisement in 3-4 days.

The ECC decided to establish Fruit Export Terminals at Sargodha and Muzaffargarh. It decided that Fruit Export Terminals would be notified under the Customs Act, 1969 (IV of 1969) once the two Dry Port Trusts have provided the infrastructure as per satisfaction of the relevant Collector of Customs.

This would facilitate export of kinoos and mangoes. The ECC approved the cascading formula for issue price of wheat from the public sector stocks. This was done to minimize the effect of removal of subsidy.

It increased the cascading price regime for issue price of wheat to flour mills this year. To provide relief in the prices of phosphatic and potash fertilizer, ECC decided that the deemed price for GST and withholding tax will be reduced on TSP, NP, SOP, IMOP. This would reduce fertilizer prices by Rs18-25 per bag and benefit the farmers as well as agricultural production.

The issues related to duty drawback on polyester products were discussed. The ECC decided to continue duty drawback on deemed import basis till the tariff on Pure Terephithalic Acid (PTA) is rationalised. ECC observed that the rates of duty drawback were calculated on the basis of deemed import of polyester staple fibre (PSF).

This fibre was included in the Duty and Tax Remission for Exports (DTRE) during the current fiscal year. PTA, however, is still excluded from DTRE. It was accordingly decided that the duty drawback rates may be re-calculated on the basis of deemed import of PTA, at the current international prices including the incidence of duty on imported raw materials.