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Hubco not liable to taxation in Pakistan

KARACHI (January 03 2003) : Hub Power Company in a release issued on Thursday said that the company is not liable to taxation in Pakistan on its income generated by the operation of the complex under the implementation agreement.

The share price during the session received heavy battering and the Karachi Stock Exchange (KSE) issued a letter to the company to safeguard the interest of the small investors.

The letter of the exchange said, 'as per the audited accounts of the company for the year ended June 30, 2002, the company is not liable to taxation in Pakistan on its income generated by the operation, under the Implementation Agreement'.

The Hubco, promptly replying to KSE's letter, said that apparently an SRO on the tax status of oil fired power projects has been issued and the company understand that clarification on this is awaited from the relevant authorities'.

The company clarified that it is not liable to taxation in Pakistan on its income generated by the operation of the complex under the implementation agreement.

The share price of the Hubco in the kerb market rose by 60 paisa to Rs 41.10 from its close of 40.50, a dealer said.

According to a dealer the government imposed 40 percent tax on the thermal power plants to discourage the import of furnace oil.

He said that the measure was introduced to encourage hydel power plants.

However, if imposed the earnings of the company would be reduced.

There is an urgent need of clarification from the CBR side to rectify the issue.

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