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ECC Abolishes VAT on Import of Sugar

Minister for Finance and Revenue, Dr. Abdul Hafeez Shaikh, chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet today.

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Ministry of Industries and Production presented a summary before ECC for the import of sugar to reduce upward pressure on prices of sugar and to buffer up the carry-over stocks before the arrival of the fresh crop.

The ECC approved the reduction of the Withholding Income Tax on commercial import of white sugar and raw sugar from 5.5 percent to 0.25 percent and also approved the removal of Value Added Sales Tax on the import of white sugar.

The reduction in taxes will incentivize the sugar mills for the import of 300,000 MT Raw Sugar up to 30th June 2021. ECC further directed the Trading Corporation of Pakistan (TCP) to import white sugar up to 500,000 MT, if and when needed during the current season.


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Ministry of Religious Affairs and Interfaith Harmony presented a summary for scaling up the ‘Road to Makkah Pilot Project’ from Islamabad airport to two more cities, i.e., Karachi and Lahore, to facilitate Hujjaj for performing Hajj under Government Scheme.

One of the pre-conditions for scaling up of Road to Makkah Project was the grant of special exemption on importing technical equipment in Pakistan from the Kingdom of Saudi Arabia (KSA).

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ECC decided that FBR will hold a separate consultation with the Ministry of Religious Affairs and Interfaith Harmony to work out the details, and the matter would be placed before the next ECC for approval.

Aviation Division presented a summary before ECC to reconstitute a high-powered committee headed by the Deputy Chairman Planning Commission, including Secretary Finance, Secretary Aviation, and Secretary Law, and Justice Division, to deliberate on financial challenges faced by the Roosevelt Hotel, New York, USA. The Committee approved the above request.

Secretary, M/o Communication presented a detailed National Freight and Logistics Policy (NFLP) framework before ECC. Members of the ECC appreciated the efforts made by the Ministry in drawing up a comprehensive draft policy and directed M/o Communications to identify and segregate actionable items that fall under its domain and place them before the next ECC for final approval.

The proposals of other Ministries and Provinces would be considered separately under some institutional arrangement at an appropriate forum.

ECC also approved a draft policy on equity investment abroad by residents/firms, which caters to the needs of the business community, and aims to improve the ease of doing business, promote exports, facilitate resident companies in raising capital from abroad.


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It will also fulfill the legitimate investment needs of the individuals.

Ministry of National Food Security and Research presented a summary to authorize TCP to make immediate arrangements for the import of 300,000 MT of wheat through the tendering process as ratified by the Cabinet and nominate PASSCO as a recipient agency for the imported wheat to replenish its stock as needed. ECC accorded approval as requested by the Ministry.

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ECC also approved another summary by the Ministry of National Food Security and Research regarding the allocation of 60,000 MT of wheat for the Food Department, Balochistan, from PASSCO’s existing stock on the subsidized rate as per previous practice.

ECC also decided that the gas rate of Rs. 772/MMBTU will apply to Agritech and Fatima Fertilizer post-November 2020 till January 2021, as requested by the Ministry of Industries and Production.

ECC accorded approval for the exemption of Sales Tax at 17 percent and additional sales tax at 3 percent on the import of 52 fire fighting vehicles by Sindh Infrastructure Development Company Limited (SIDCL).

Ministry of Communications updated ECC regarding progress made in conversion of National Highway Authority (NHA) loans into Government loans as per the last ECC held on December 02, 2020. NHA requested nine months to prepare a commercially viable business plan in consultation with other Ministries.

NHA’s debt restructuring would be linked with the outcome of the said business plan. ECC also accorded approval of the proposal that outstanding mark-up accrued to date on all CDL/FRL on NHA would be capitalized as of June 30, 2020. There will be a moratorium on further accrual of mark-up till the finalization of the business plan.


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The following technical supplementary grants were approved by the ECC:

  • Rs. 10 million for the purchase of Spare Parts for the helicopter maintenance by HQ Frontier CORPS Balochistan
  • Rs. 67,459,100 to Ministry of Interior for the payment to hired solicitors for pursuing cases in the UK
  • Rs. 81.40 million to Ministry of Law and Justice for the establishment of 3 new Courts
  • Rs. 16.628 billion to the Ministry of Planning Development and Special Initiatives for the completion of 21 schemes of Sindh Infrastructure Development Company Limited.
  • Rs. 82.5 million for the completion of the Project titled “1000 Industrial Stitching Units all over Pakistan” by the Ministry of Industries and Production.
  • Rs. 300 million for the completion of the Project titled “KA7151 Establishment of 132 KV Grid Station at Bin Qasim Industrial Park” by the Ministry of Industries and Production.

A draft Textiles and Apparel Policy, 2020-25 by the Ministry of Commerce was postponed to the next ECC for a detailed discussion.

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Federal Minister for Interior, Sheikh Rasheed Ahmad, Minister for Privatization, Mohammad Mian Soomro, Minister for Planning, Development and Special Initiatives, Asad Umar, Minister for Industries and Production, Hammad Azhar, Adviser to the PM on Commerce, Abdul Razak Dawood, Minister for Petroleum, Omer Ayub, Minister for Maritime Affairs, Ali Haider Zaidi, SAPM on Revenue, Dr. Waqar Masood, SAPM on Energy, Nadeem Babar, Adviser to the PM on Institutional Reforms and Austerity, Dr. Ishrat Hussain, and Minister for National Food Security and Research, Syed Fakhar Imam, participated in the meeting. Governor State Bank of Pakistan, Reza Baqir, also participated through a video link.

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