Summary FBR chairman said he couldn't raise the taxes when every other project was to be exempted from tax
ISLAMABAD: (Dunya News) – Business reporter Shahbaz Rana has on Wednesday revealed that the government, despite claims that Orange Line Metro Train was not part of China-Pakistan Economic Corridor (CPEC), asked Economic Coordination Committee (ECC) to exempt the project from taxes declaring it a part of CPEC, reported Dunya News.
Talking to Dunya News on ‘Dunya Kamran Khan Kay Saath’, Shahbaz Rana said that the opposition had been claiming since the first day that Orange Line was a part of CPEC while Punjab government Federal Minister for Planning and Development Chaudhry Ahsan Iqbal kept denying the same, probably in order to avoid criticism that Punjab was benefiting more from CPEC.
However, on Tuesday, when the ECC meeting was held, a request was submitted by the government to declare the project a part of CPEC so that it could be exempted from the taxes. However, the bureaucrats showed stiff resistance on the occasion, objecting to the proposal and defying the government pressure and repeated attempts by Finance Minister Ishaq Dar.
“ECC is the most important body probably of the cabinet and it is held three or four times a month. However, the proceedings in these meetings are kept highly secret. This week too, the agenda wasn’t shared ahead of the meeting. The summaries weren’t shared with the relevant ministers. According to rules the agenda should be circulated a week before the meeting but most people, even some of the ministers, had no idea what was on the agenda”.
He said that the bureaucrats resisted the move. ‘They said that this would have serious political repercussions. “Sindh and Khyber Pakhtunkhwa (KP) governments would criticise the move. How are you going to answer that criticism?” Chairman Privatisation Committee Muhammad Zubair played a very nice role on the occasion. Federal Board of Revenue (FBR) chairman Nisar Khan, who is criticised the most, he stood up and said in clear terms that he was always told by the government to raise the tax revenues while every few days a new project would be submitted to be included into CPEC and thus exempted from the tax’, he said.
Shahbaz Rana also highlighted that LNG deal was also quite secretive. He said that Metro’s financing was extremely secretive. He said that the government didn’t even know what the ratios of equity and debt in the loans secured from Chinese banks for this project were. “It took them around four to six months to resolve this issue. Then the Chinese bank demanded to be exempted from the tax on dividends. After six months, another PC-1 was issued. The rules are not being followed. Just a phone call comes from Lahore and things are done. The situation is that they don’t even know at the beginning what the exact cost would be. During the process, they realise that the estimated cost was going to rise by 20 billion rupees and the issue is resolved by demanding tax exemptions. This is the state of the affairs”, he said.
Talking about LNG deal with Qatar, Rana said that although the document was serious but he had read it somehow. “What I saw from the document is that Pakistan’s interests hadn’t been secured but the selling party’s interests were. There is a clause in the document which says that Pakistan has to pay for the gas under any condition. For example, there is an accident due to which the gas could not reach Pakistan. We’ll still have to pay for it. Then it binds Pakistan not to renegotiate the gas price for the next ten years. Although the prices in the international market are going down but Pakistan cannot renegotiate it”.
Comparing it with Pakistan People’s Party (PPP) tenure’s agreement for LNG, the senior journalist said that it was a much better agreement compared to the current one despite the fact that it had received serious criticism from all sides.
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