ISLAMABAD – The Economic Coordination Committee of the cabinet (ECC) on Tuesday approved 18 amendments in the three-year strategic trade policy, approving regulatory changes in the import and export policy orders to boost exports, while the incentive package for attracting new investment in auto sector was deferred until the next meeting.
The meeting of ECC was held under the chairmanship of Finance Minister Abdul Hafeez Shaikh. Prime Minister Yousuf Raza Gilani had already approved the amendments sought by the Ministry of Commerce for the Strategic Trade Policy Framework 2010-13.
An official source said the meeting discussed at length the conditions for attracting new investment in the auto sector, with the ministries differing on various incentives to new investors.
The Ministry of Commerce proposed that the depreciation cost on the import of vehicles up to five years old should be raised from one to two percent per month, with a maximum limit of 50 percent of the price. However, some of the ministers opposed the proposal and suggested that the depreciation cost should be limited at one percent for a maximum period of 40 months, otherwise the cost would fall close to that of locally-produced cars.
It was decided that the Ministry of Commerce and the Federal Board of Revenue would give a detailed briefing on the proposal in the next ECC meeting.
The ECC also sought a detailed presentation on determination of the data on completely-knocked-down (CKD) kits for new entrants. The Ministry of Commerce had proposed two proposals that the components, parts and CKD kits not manufactured locally should be taxed at 50 percent of the existing rate of 32.5 percent ad-val customs duty.
