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Event Title: Tax Exemption Crucial for Utility Stores Corporation to Operate as a Welfare Organization

Event Date: 2019-06-27

The functional Committee on Problems of Less Developed Areas, in its meeting on Thursday recommended that since Utility Stores Corporation (USC) is a welfare organization it must be exempt from paying tax.  This was said while deliberating over the performance and challenges of the organization.


MD, USC Omar Lodhi informed the Committee that the Organization was paying taxes worth PKR 6 billion to the FBR, per annum which is causing the organization a bottom line negative of PKR 7 billion. He notified that the issues that weigh the organization down are taxes and Public Procurement Regulatory Authority (PPRA) Rules that compels the organization to go for the lowest possible bidder.  The trend of hiring daily wage labour is another issue that is a negative for the organization, making it impossible to crackdown on corruption and hoarding. 


While discussing the implementation of recommendation made in previous meetings, Chairman Committee, Senator Usman Khan Kakar enquired about the status of setting up mobile stores in remote areas such as Chitral, Musa Khel, Sorab, Awaran, Kachi, Bolan, Mastung, Achakzai, Toba, Kakri, Qamadin, Karez.


MD Utility Stores informed the Committee that setting up mobile stores at this point would cause a further crunch on the budget, which is barely enough to pay salaries.  He said that in a few months the organization would be in a position to begin this endeavour. 


The Committee encouraged the organization to set-up more stores in less developed areas, especially in District Musa Khel and Sherani. MD USC Omar Lodhi assured the Committee that USC seeks expansion and will open up a new store in Musa Khel within four months.  The Committee was informed that the criteria followed for expansion was population and distance. 


The Committee recommended that to ensure that the USC fulfils its purpose it is crucial, that systems are in place.  It was recommended that the FBR and PPRA be summoned in the next meeting, so that more details of that USC tax may be procured. It also suggested that Utility stores be increased in less developed areas, especially in remote areas of Punjab.  The Committee directed USC that contract employees be regularized and the recruitment process that is pending for the last 5 - 6 years be completed.  It also stressed the need for a computerized system to be developed throughout the country, so that USC records for inventory, stocks, sales, purchase of products be maintained to ensure checks and balances and eradicate corruption. 


Chaired by Senator Usman Khan Kakar, the meeting was attended by Senator Kulsoom Parveen, Senator Sardar Muhammad Shafiq Tareen, Senator Gianchand and senior officers from the Ministry for Industries and Productions, Utility Stores Corporation along with all concerned.