ISLAMABAD: It baffled the members of a parliamentary panel when a top government official apprised that in the last more than two decades, not a single private ship or company has been registered in Pakistan due to inconsistency in tax policies that shied away investors.
The senate standing committee on Maritime Affairs met here with Senator Rubina Khalid in the chair here Wednesday to discuss the Pakistan Merchant Marine Policy, 2001, and the amendments made therein in 2019, and to review the budgetary allocation and its utilization by the Ministry of Maritime Affairs and its attached departments, during the financial year 2021-22.
The committee expressed grave concern on the non-registration of new ships or companies since more than two decades.The committee was apprised that no company or ship has been registered in Pakistan except Pakistan National Shipping Cooperation (PNSC) ships because of the wavering policies that are not in the favor of the investor.
“Due to changes and inconsistency in policies in terms of tax exemptions, incentives, and tax regimes the investor has lost its confidence,” the Chairman PNSC said.The Committee examined a detailed comparison of the Global Practices in terms of preferences and incentives. The Chairman of PNSC was of the opinion that if the policies and regimes become constant and competitive in the global market it will encourage the investors.
The Secretary of Maritime Affairs said that to resolve the issue of inconsistency in policy and compatibility to that of the global market a revised policy may be devised in relation to the current incentives and feasibility in terms of the country’s capacity. The Committee sought a brief on the revised policy within a fortnight.
While reviewing the budgetary allocation and expenditure for the financial year 2021-22 and its utilization by the Ministry of Maritime Affairs, the chairman of the committee sought details on the expenditure made and revenue generated by the departments. The committee also demanded details of the developing budget for Port Qasim and Karachi Port Trust (KPT) and other departments.
The Chairman Committee also sought details on the procurement policy of PNSC. The Chairman PNSC informed the committee that on the procurement of new ships a wait-and-see policy is being applied globally since the International Maritime Organization (IMO) ship regime will change in 2025 and again by 2030.
Senator Rubina Khalid raised questions as to why an old ship is being purchased in comparison to a new one. The Ministry informed that there is a financial dynamic behind procuring an old ship instead of a new one and proposed to present a brief on it in the next meeting. The Chairman PSNC also informed the committee that the cost of an old ship is $21 million and of a new one is around $55 to $60 million.
While briefing the committee on the Merchant Marine Policy, 2001 the committee was informed that the target of the Merchant Marine Policy is to expand and update the Pakistan Flag merchant marine fleet to increase the present share of Cargo from 5 percent to 40 percent.
The committee was informed that no preference will be given to PNSC in private sector cargo. The committee was also informed that the amendment in the policy 2019 also includes that no federal taxes (direct or indirect) shall be levied to the detriment of Pakistan Resident Ship Owing companies during the exemption period and the Pakistan flag vessels to be provided priority berthing at all Pakistani Ports.
The meeting was attended by Senator Abida Muhammad Azeem, Mohamad Abdul Qadir, Danesh Kumar, Dost Muhammad Khan, Muhammad Akram, and Senator Saifullah Abro. The Secretary, Ministry of Maritime Affairs, Chairman PNSC and officers of other attached departments were also in attendance.
