Govt. briskly moves towards safeguarding IMF Tranche

Ordinances readied to implement power tariff trek, end corporate tax breaks.

Through presidential ordinance a serious move has been taken to fulfill the IMF conditions for securing the release of $500 million tranches, the government has decided to implement the withdrawal of corporate tax exemptions as well as putting in place a mechanism for automatic electricity power tariff inflation of about Rs5.36 per unit (34 percent) over the next 27 months.

The board can only approve the tranche when Islamabad puts in place the legislations as per agreed deadline, which is now only possible through ordinances.

The immediate promulgation of an ordinance for the automatic electricity power tariff inflation was felt so crucial that a bill had already been cleared by the National Assembly’s Standing Committee on Power on March 11 and is just awaiting a formal passage by the National Assembly.

“In order to show the resolve of the federal government regarding the implementation of the Circular Debt Management Plan (CDMP), and streamlining the tariff determination process, it will be essential to introduce the amendments to the amendments… as early as possible. It is, therefore, proposed that said amendments may be introduced through an ordinance,” said a hurriedly moved summary by the Power Division to the Federal Cabinet for approval.

“In order to show the resolve of the federal government regarding the implementation of the Circular Debt Management Plan (CDMP), and streamlining the tariff determination process, it will be essential to introduce the amendments to the amendments… as early as possible. It is, therefore, proposed that said amendments may be introduced through an ordinance,” said a hurriedly moved summary by the Power Division to the Federal Cabinet for approval.

The ordinance will be called “Ordinance to Further Amend the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997”. The summary said the ordinance would put in place a system for transparent and judicious regulation of the country’s electric power sector based on sound commercial principles and socio-economic policies of the government.

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