Economic Coordination Committee (ECC)
Dr. Abdul Hafeez Shaikh, the Federal Minister for Finance and Revenue conducted a meeting on the Economic Coordination Committee (ECC) of the Cabinet recently. In this meeting, Secretary of the Ministry of Information Technology and Telecommunication introduced a summary about the taxation problems regarding the telecommunication sector. In this summary, the secretary told that the Economic Coordination Committee (ECC) has approved a phase-wise reduction in taxes on telecom services.
While talking to Pakistani Tech News, one of the participant of ECC meeting told that all these tax relief actions will be part of the coming Finance Bill of 2020-2021. Furthermore, including the termination of the taxes of several kinds of the import tools, and it will be applied from 1st July of 2021. Moreover, if we talk about the experts, then it is stated that these kind of tax reduction are seeing to be applicable before the coming year. There reason is that there are a number of qualifications regarding each tax which will be measured by the ECC. In other words, the Govt. will include these relief or reduction from the coming budget from Federal.
The recommendations are presented to ECC form the sub-committee for the approval. These recommendations will be approved by the Federal Board of Revenue (FBR). Below mentioned recommendation has been approved by the Economic Coordination Committee:
Advance Income tax has been reduced: from 12.5% to 10% w-e-f July 2021 and to be further reduced to 8th July 2022. Such reduction of phased-wise will continue.
From 17% to 16%, FED reduced within the federal capital. Currently, within the harmonization framework, Harmonization in provinces will be included.
According to Lahore High Court’s Judgment in favor of Ufone & Zong, Government to simply accepted it and implement it for all the Mobile operators, and withdraw 250 Rs. issuance tax on the sale of latest SIM cards.
Telecom Sector (having PTA License) should be included. They will also be in Division II of PART III of Income-tax Ordinance to grant relief of three minimum tax rather than 8%.
Under HS Code 8517 and HS Code 8544, Pakistan Telecom Companies are dependent to import various equipment. It’s also proposed that the Regulatory Duty on were equipment are need to be eliminate. ECC acknowledged that it can be actuated by the National Tariff Commission’s choice.
Recently, 20 October 2020, the ECC had created a sub-committee for due deliberation under the Chairmanship of the Adviser to the PM, Dr. Ishrat Hussain.
Different minister attended the meeting, including the names mentioned here. The federal Minister for Industries, the federal Minister for National Food Security and Research Syed Fakhar Imam, and the Adviser to the PM on Institutional Reforms, Production Hammad Azhar, and Austerity Dr. Ishrat Hussain, the SAPM on Revenue Dr. Waqar Masood, the SAPM on Power Tabish Gauhar, the SAPM on Petroleum Nadeem Babar, and the Chairman Board of Investment (BOI) Atif Bokhari attended the meeting.