Govt to Distribute Billions of Rupees to Chambers and Export Associations

The Federal Government has decided to distribute the Export Development Fund (EDF) worth Rs. 9.47 billion among various Chambers of Commerce and Industry and Export Associations for export development.

Sources said that the Federal Cabinet decided that an Export Development Surcharges (EDS), equivalent to 0.25 percent of the export value, may be levied on all exports, with effect from 1 July 1991, and that the government should transfer the proceeds of the EDS to the EDF to be distributed.

The EDF was established through a resolution on 1 September 1992, and the EDF Act, 1999, was subsequently passed before its amendment in 2005.

As per the provisions of the Act, the EDF consists of the entire receipts of the EDS and all the incomes accruing from its investments and property and is non-lapsable.

The Act further stipulates that the Ministry of Finance will propose to the Parliament an appropriation equivalent to the receipts of the EDS collected during the preceding year which will be transferred to the EDF after the approval of the budget estimates for the year.

While ratifying case no. 1081/37/2021, dated 9 September 2021, for the approval of the Strategic Trade Policy Framework 2020-25, the Cabinet agreed that the entire amount of the EDS would be transferred to the EDF from FY2020-21 onward.

In the terms of the Government of Pakistan, Revenue Division’s Notification SRO 10(1)/2003 dated 4 January 2003, and State Bank of Pakistan (SBP) Circular No. 02 dated 22 January 2003, the EDS is collected by the Authorized Dealers at a source from the rupee amount converted from the FCY on the receipt of the export proceeds and is later credited to the government under sub-head-0213300-EDS maintained by the National Bank of Pakistan (NBP).

The collection during FY2020-21, as per the information provided by the NBP, was Rs. 9.47 billion, whereas the EDF has only been allocated Rs. 1.5 billion for FY2021-22.

The Economic Coordination Committee (ECC) of the Cabinet recently accorded the approval of Rs. 4.5 billion as a supplementary grant out of the total short provision of Rs. 7.9 billion in the current quarter, and the Cabinet will give its approval accordingly in its upcoming meeting.