PM okays revised economic package for NWFP, FATA
ISLAMABAD: Prime Minister Yousaf Raza Gilani on Saturday approved the revised package to rehabilitate economic life in the NWFP, FATA and PATA.
The revisions to the package have been made keeping in view changes and additional measures suggested by the Sarhad Chamber of Commerce and Industry (SCCI) and the business community of the NWFP.
Mark-up: According to the revised package, for all existing loans, banks would be advised to charge the mark-up at 7.5 percent or at the Karachi Interbank Offered Rate (KIBOR), whichever is lower, for the next two years. There will be a total write-off of loans — including micro finance — in Buner, Swat, Malakand and Chitral. In this regard, banks would bear the cost of such write offs to the extent of the amount held in provision and interest in the suspense account, while the rest of the cost would be borne by the government.
For all existing business loans in the NWFP, FATA, PATA except loans to the Tobacco, Textile, Cement, Sugar and Beverages sectors, banks would be advised to charge 7.5 percent per annum mark-up or at the KIBOR, whichever is lower, for the next two years. The difference between 7.5 percent mark-up and the rate charged would be borne by the government via subsidies through budgetary allocations or by authorising the State Bank of Pakistan (SBP) to deduct the cost of subsidy from its remittable profit to the government.
Small loan scheme: Under the revised package, the SBP would devise a concessional refinance scheme for loans up to Rs 0.5 million in consultation with the representatives of trade bodies. Such loans would be partially covered under the Credit Guarantee Scheme (CGS). For this purpose, the government will transfer funds Rs 2.5 billion allocated for CGS to SBP.
Under the revised package, the areas would remain divided into three categories i.e. the most affected, moderately affected and the lesser affected areas. But Peshawar has been included in the most affected areas category and Nowshera to the moderately affected areas.
As part of the additional incentives by the Federal Board of Revenue (FBR), the FBR will consider a reduction in duty on the Afghan Transit Goods. Exports of Plastic Venial Coated (PVC), High Density Poly Ethylene (HDPE) pipes and other fitting products via the Ghulam Khan Check Post would be considered by the FBR.
The ‘income tax exemption’ for small traders of the most and moderately affected areas’ categories in the NWFP, FATA and PATA would be enhanced from Rs 0.1 million to Rs 0.3 million for fiscal year 2010-2011 through an amendment in the Income Tax Ordinance via the Finance Act 2010.
Source: Daily Times