Federal govt withdraws GIDC Ordinance after criticism

ISLAMABAD, Pakistan: As per the directives of Prime Minister Imran Khan, the federal government has withdrawn the controversial Gas Infrastructure Development Cess (GIDC) Ordinance.

President Dr Arif Alvi recently promulgated the Gas Infrastructure Development Cess (Amendment) Ordinance 2019 to waive half of the outstanding liabilities of fertiliser, textile, power generation and compressed natural gas (CNG) sectors.

However, the ordinance triggered a wide range criticism, forcing the government to withdraw it.

The Statement issued by the Prime Minister’s Office on Wednesday stated that “The total amount stuck in the GIDC litigation from January 2012 till December 2018 is about Rs 417 billion. In the first of litigation, the Supreme Court was pleased to annul the GIDC statue. The federal government’s review petition was also dismissed by the Supreme Court. Thereafter fresh legislations were brought about, which are presently under challenge before the Provincial High Courts and a set of appeals is also pending in the Supreme Court.

In the above back drop, an Ordinance was issued with a view to recover 50 percent of the stuck revenue by way of an out of Court settlement after consultation with the industry. However, in view of the recent controversy, the Prime Minister, in the interest of transparency and good governance, has decided to withdraw the said Ordinance and direct the Attorney General to move an application for urgent hearing in the Supreme Court, so that the matter is decided at the earliest, strictly in accordance with the law and the Constitution.

However, the prime minister wished to inform the nation that going to the Court carries a risk because the decision could go either way. This means that the government could get the whole amount or could lose it all and possibly forgo any prospects of future revenue collections under this head. Also on top on this, the government could be saddled with the burden of administering refunds of approximately Rs 295 billion of the principal amount.”

The government’s economic team led by the Prime Minister’s Adviser on Finance and Revenue Dr Abdul Hafeez Shaikh also briefed the media about the decision regarding the withdrawal of GIDC Ordinance and government’s performance on economic front.

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Dr Abdul Hafeez Shaikh was flanked by the Minister for Power and Petroleum Omar Ayub Khan, the Prime Minister’s Adviser on Commerce Abdul Razzak Dawood, the Prime Minister’s Special Assistant on Petroleum Nadeem Babar, and the Federal Minister for Economic Affairs Division Hammad Azhar.