Minister fails to evolve consensus

ISLAMABAD: Minister for Water and Power, Khawaja Asif has reportedly failed to evolve consensus on the new Auto Policy 2015-20 as Federal Board of Revenue (FBR) is still resisting the grant of fiscal incentives for existing car assemblers at par with new entrants, well informed sources told Business Recorder.

A couple of days ago, Asif who is convener of a sub- committee of the Economic Coordination Committee (ECC) of the Cabinet on auto policy convened a meeting of all the public stakeholders to evolve a consensus on the draft policy but, once again, he failed to convince the FBR to review its stance to grant similar fiscal incentives to local OEMs which are being offered to new entrants.

The meeting was attended by the deputy convener of the sub-committee, Muhammad Zubair, Chairman Privatisation Commission, Mifta Ismail, Chairman Board of Revenue (FBR) and representatives of Law Ministry, FBR, Commerce and Ministry of Industries and Production (MoI&P).

According to sources, at one stage confusion prevailed among the participants because Chairman BoI started an argument on an old draft of the auto policy. However, he was informed that he was referring to an outdated draft.

The representative of Law Ministry, sources said, withdrew objections raised in the ECC meeting, saying that since the policy is for private sector, Law Ministry would not offer comments, the sources continued.

Most of the stakeholders, sources said, argued that if the existing OEMs invest in green field they should be treated at par with new entrants. However, the FBR representatives opposed the proposal like Chairman FBR did in the ECC meeting.

The representative of Ministry of Industries and Production informed the participants that he has talked to the Chairman FBR on this issue and the latter is now convinced to grant incentives to the existing OEMs at par with the new entrants. However, the issue remained unsettled as Chairman was not present in the meeting. Chairman FBR Tariq Bajwa in his comments in the ECC meeting observed that there was not enough incentive for attracting new investment especially in the context of difference in the timeframe for incentives.

Ministry of Industries and Production has proposed 10 per cent duty on import of both localized and non localized parts for an initial two years; thereafter it will be 35 per cent (proposed rate for last three years) on non localized parts as per localization plan provided to the new investors of cars and LCVs. FBR did not agree with the single rate of duty for localized and non-localised parts.

Khawaja Asif, sources said, urged the stakeholders to first evolve consensus and then bring it before him for final clearance. The next meeting of sub- committee is expected to be held on Tuesday (tomorrow).

The ECC in its meeting on August 12, 2015 directed Secretary Industries, Secretary Commerce and Chairman FBR to review ADP within two weeks and the final draft of the policy be made public to solicit public feedback.

Khawaja Asif and Muhammad Zubair were unhappy in the ECC meeting held on August 12, 2015 that further delayed approval of the Auto Policy.

Khawaja Asif argued that Chairman PC and Chairman BoI had been closely associated with the consultation process and nothing had been left unattended during the last two years of consultation on auto policy.—MUSHTAQ GHUMMAN