Package details notified : The loans in Buner, Swat, Malakand Agency and Chitral will be totally written off امدادی پیکیبج کی تفصیلات جاری کردی گئیں۔۔۔ بونیر، صوات، مالاکنڈایجنسی اور چترال میں زرعی قرضے معاف کردییے گئے۔۔

The News - PESHAWAR Saturday, January 09, 2010: The Finance Division has issued details of relief announced by Prime Minister Syed Yusuf Raza Gilani here on Thursday for the revival of agriculture, business and industry adversely affected by militancy in the NWFP and tribal areas.

For the purpose of tax relief, the areas have been divided into three categories. The most-affected areas include all the seven agencies of Fata, Malakand division, Hangu, Bannu, Tank and Kohat districts, while Peshawar, Charsadda, DI Khan, Battagram, Lakki Marwat, Swabi and Mardan are in the moderately affected category. The less-affected areas are Nowshera, Haripur, Abbottabad, Mansehra and Kohistan districts. 

As per details of tax relief, the federal government will allow the registered persons/importers or any other business entities owing any amount in form of customs duty, sales tax or excise duty and income tax, a waiver of the entire amount of penalty and default surcharge if the principal amount is paid by June 30, 2010.

This treatment shall apply to the most affected and moderately affected areas. Sales tax on the electricity consumed by the manufacturing units operating in these areas, whether registered or unregistered for the purpose of sales tax, will also be exempted that will give a boost to the marble, cosmetics and silk industries.

Income tax payable along with electricity bills of commercial and industrial consumers located in the most and moderately affected areas will be fully exempted. Exports originating from these areas will be exempted from income tax on exports. This exemption will be allowed till the end of the next financial year.

The federal excise duty on goods produced and services rendered will be reduced from January 1 to June 30, 2010 as follows: Total exemption for Fata, Pata and other most-affected areas and 50 per cent in moderately affected areas.  

The rate of domestic sales tax on goods manufactured and supplies made in the most and moderately affected districts will be reduced by 50 per cent of leviable rates. Recovery of the outstanding arrears of income tax, sales tax and excise duty, etc, will be allowed through easy instalments over a period of three years on case-to-case basis and on agreed terms and conditions. However, the concessions will not be applicable to the manufacturers and suppliers of cement, sugar, beverages and cigarettes.

Electricity and gas bills in Malakand division from May to September 2009 will be completely waived off. For the banking sector, following incentives have been announced:

The State Bank of Pakistan has launched an Agricultural Loans Refinancing & Guarantee Scheme of Rs3 billion for providing loans at a maximum mark-up of eight per cent. The SBP will share up to 50 per cent of bona fide losses of banks from its own resources.

Under the Prime Minister’s Relief Package for Small Farmers of Malakand Division and Fata, loans of Rs2.56 million will be written off. For ensuring growth of SME credit, the SBP will launch a Refinance Facility of Rs10 billion to be disbursed through mandatory targets to banks.

For existing loans, the banks will be advised to charge mark-up at 7.5 per cent pa or at KOBOR, whichever is lower, for the next two years. The State Bank will also launch a Credit Guarantee Scheme for Small & Rural Enterprises with a support of Rs1 billion from UK’s DFID. The State Bank will put in efforts to reserve this facility exclusively for the SME borrowers of NWFP, Fata and Gilgit-Baltistan.

The loans in Buner, Swat, Malakand Agency and Chitral will be totally written off. The State Bank would cause the banks to undertake write-offs and move compensatory tax relief cases of these banks to the government.

The government will also consider transferring partly or fully this year’s budgetary allocation of Rs2.5 billion for SME Credit Guarantee Fund, allowing increased outreach of this scheme.

As Dir Lower, Dir Upper and Shangla, all located in Malakand division, were not mentioned in the list of districts where bank loans would be written off, it was later clarified that the decision would apply to Dir Lower and Upper and Shangla. The News - By Nisar Mahmood