Payment of 3 percent fee/charges to CCP: FD’s viewpoint given preference

ISLAMABAD: The Federal Cabinet has reportedly given preference to Finance Division’s viewpoint over Cabinet Committee on Legislative Cases (CCLC) regarding payment of three percent fee/ charges by regulatory bodies to be paid to Competition Commission of Pakistan (CCP), well informed sources told Business Recorder.

Insiders claim that the CCP which was facing severe criticism in the recent past for allegedly colluding with the mafias, is now showing its teeth, with the blessings of some of the key government office holders, who played their role in recent appointments.

On Oct 21, the CCLC headed by law minister, was informed by the Finance Division that the federal government prescribed a charge of 3 percent on the fees and charges levied by the following five regulatory agencies as contribution to CCP fund to ensure its financial autonomy and sustenance: (i) Securities and Exchange Commission of Pakistan (ii) National Electric Power Regulatory Authority (iii) Oil and Gas Regulatory Authority (iv) Pakistan Telecom Authority and (v) Pakistan Electronic Media Regulatory Authority. However, the regulatory bodies did not comply with their statutory obligations, and contested on the ground that they are surrendering the surplus to the Federal Consolidated Fund (FCF).

The CCLC was also informed that meeting under the chairmanship of special secretary Finance was held on Aug 17, with representatives of the five regulatory bodies to resolve the long-standing issue of payment of 3 percent to CCP. The regulator bodies agreed in principle to pay the 3 percent of fee on charges collected by them to the CCP before surrendering the surplus to FCF subject to issuance of revised SRO.

The CCLC was further informed that SRO has been prepared under clause (f) of subsection (2) of Section 20 of the Competition Act, 2010, giving direction to the regulatory authority (ies) to make payment of 3 percent of fee and charges collected by them, through bank transfers for credit to the account of the Commission, by the tenth of the month following the quarter and before surrendering the surplus to the Federal Consolidated Fund, under intimation to the Commission. The SRO has been vetted by Law & Justice Division.

It was noted that the Finance Division has examined the revised SRO and supports issuing it to ensure financial independence of the CCP, guaranteed under the Competition Act, 2010.

However, the CCLC observed that the proposed SRO/notification cannot have retrospective effect in the presence of various court judgments. In order to make its effectiveness from a retrospective date, amendment has to be made in the relevant statute itself. The CCLC did not approve it in the present shape.

When the minutes of the CCLC were presented before the Cabinet on Nov 17, Prime Minister Imran Khan highlighted the imperative of financial autonomy of CCP and enquired why CCLC did not approve the SRO/notification proposed by the Finance Division in the case titled “payment/transfer of 3% of fees and charges to the Competition Commission of Pakistan”. Minister for Law & Justice Division/Chairman CCLC explained that the proposed SRO/notification could not have retrospective effect and, therefore, it would be better to amend the relevant statute through an Ordinance. It was opined that the regulatory authorities being government bodies would not challenge the retrospective effectiveness in court.

The Cabinet, however, did not ratify the decision of CCLC and instead approved the proposal of Finance Division of issuing the revised SRO to ensure financial independence of the CCP.

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