ANNOUNCEMENT 01 Jun 2009

In June 2009, the government of Pakistan announced altered import support.

NUMBER OF INTERVENTIONS

3

  • 2 harmful
  • 0 neutral
  • 1 liberalising

SOURCE



SMEFD Circular Letter No. 07 of 2009

http://www.sbp.org.pk/sme/circulars/2009/CL7.htm

Inception date: 08 Jun 2009 | Removal date: 31 Dec 2009
Still in force

Import incentive

On 8 June 2009, the State Bank of Pakistan (SBP) allowed all export-oriented projects to get financing for imports of generators/captive power plants under the Long Term Financing Facility (LTFF) even though the project might not be eligible under the original LTFF scheme. The following additional conditions apply - 
 

  • the capacity of the generator/captive plower plant should not be greater than that required for manufacturing of the products
  • refinancing is provided by the SBP to the banks up to 50% of the cost of import, as opposed to 100% for other projects
  • this facility is available for all Letter of Credits (LCs) signed after 1 January 2008 and to be retired between 1 January and 31 December 2009. 
  • the minimum exports of the concerned projects should be at least 50% of the sales

 
The LTFF was announced in 2007 to provide long term local currency financing for imported and locally manufactured plant & machinery used for certain export oriented projects that have annual exports of at least USD 5 million or at least 50% of the sales, whichever is lower.

The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries
 

Inception date: 08 Dec 2009 | Removal date: 31 Dec 2009
Still in force

Other export incentive

The Long Term Financing Facility provides subsidized financing of plant and machinery to be used in export-oriented sectors. This facility subsidizes the cost of production of export goods and therefore is likely to affect firms in the international market of these goods.

 
N/A
 
N/A
Inception date: 08 Jun 2009 | Removal date: 31 Dec 2009
Still in force

Interest payment subsidy

Under the Long-Term Financing Facility, financial institutions provide subsidized local currency financing for firms to purchase plant and machinery for their export-oriented projects.

By providing financial support for plant and machinery, the state act subsidizes the cost of production in the specified sectors and provides an unfair advantage against similar goods in the domestic and international market.

 
N/A
 
N/A