20 years’ tax break for new oil refineries: Abbasi

By Staff Reporter
Saturday – April 28, 2018
ISLAMABAD: Prime minister (PM) Shahid Khaqan Abbasi chaired a meeting of the economic coordination committee (ECC) of the cabinet on Friday, whereat the ECC approved an incentive package for setting up ‘new’ state-of-the-art deep conversion oil refinery projects countrywide, includes 20 years’ income tax holiday.

According to an official statement, the package includes exemption from all duties, taxes, surcharges and levies on import, its contactors or any other persons, of all machinery, vehicles, plant and equipment, other materials and spares and consumables for setting up operation, maintenance and repair of refinery, withholding tax, import relating to foreign contractors/subcontractors and their personnel in connection with engineering, procurement, construction and commissioning.

Sales tax and excise duty on supply of locally manufactured building and construction of material, equipment and service for setting up of refinery will also be exempted.

New refinery projects will be given a pricing mechanism which shall be no less favorable than the prevailing mechanism. The new projects will also be facilitated in project infrastructure such as single point mooring (SPM), jetties, subsea/land pipelines, etcetera.

The package also grants waiver to applicable development surcharge on the value of exports under the export processing zones authority (EPZA) rules 1981 in case refinery project is set up in export processing zone (EPZ).

This decision will facilitate establishment of new state-of-the-art refineries in any part of Pakistan that will ensure sustained supply of petroleum products in various parts of the country at affordable prices and reduce the import bill of petroleum products.

This step will induce an expansion of existing refineries and will also increase the minimum 100,000 barrels per day capacity.

This will also be applicable to Pak-Arab refinery (PARCO) coastal refinery project (PCR).