FBR Exempts CVT of Reko Diq

By Published On: December 13, 20222.1 min readViews: 759

FBR Exempts CVT of Reko Diq

By Published On: December 13, 20222.1 min readViews: 759
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Federal Board of Revenue (FBR) on Monday exempted capital value tax (CVT) on all assets of Reko Diq Mining Company.

The FBR issued SRO 2200(I)/2022 to announce that the federal government had exempted all assets of the Reko Diq Mining Company (Private) Limited (formerly) Tethyan Copper Company Pakistan (Private) Limited from the whole of the capital value tax payable under sub-section of section 8 to the Finance Act, 2022.

It is worth mentioning that the Economic Coordination Committee of the Cabinet (ECC) a day earlier took important decisions regarding Reko Diq.

The ECC considered and approved two important agenda items related to Reko Diq project, thus paving the way for early start of the Reko Diq Project. Ministry of Energy (Petroleum Division) submitted a summary on accrued interest with respect to the amount held in an escrow account in connection with the Reko Diq Project dispute settlement.

It was presented that government of Pakistan (GoP) and Provincial Government of Baluchistan (GoB) entered into an out-of-court dispute settlement with M/s Tethyan Copper Company Pvt Limited- a consortium of Barrick Gold Corporation of Canada and M/s Antofagasta PLC of Chile, in respect of Reko Diq Copper-Gold Project in Chaghai district of Baluchistan.

As per settlement terms, Government of Pakistan has to clear liabilities to Antofagasta PLC. In the light of the terms of agreed settlement, the ECC allowed Finance Division to direct GHPL (for its own as well as GoB’s share), OGDCL and PPL to deposit the aggregate amount of interest to the sum of US$ 22,718,173/- in the escrow account from March 31, 2022 to December 15, 2022.

The ECC further allowed Finance Division to arrange the interest payable for GoB’s share amounting to US$ 8,519,314 /- from the loan of Rs. 65 billion already raised by the GHPL with the GoP guarantee.

Further, the ECC allowed the concerned Divisions of GoP and the SOEs to act in such a manner to ensure that the deposited amount alongwith interest deposited by the SOEs in the escrow account to form part of the consideration for share purchase of Reko Diq Mining Company Limited.

The ECC also considered and approved a proposal of Finance Division through a summary on funding plan of Government of Pakistan for share of Government of Baluchistan in Reko Diq Project.

As per proposal, overall funding commitment of US$ 717 million over the period of 6 years by GoP in respect of GoB SPV Project Capital Commitment to be provided by the Government of Pakistan.

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Rida Malik

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