FBR collects Rs526bln in taxes on POL products in 2015/16

KARACHI: The apex tax authority witness a massive 22 percent jump in revenue collection from petroleum products during the fiscal 2015/16 despite a sharp 35.5 percent fall in oil imports in this period, an official said on Tuesday.

A senior official at Federal Board of Revenue (FBR) said the board collected Rs526.84 billion as duty and taxes on petroleum products as compared to Rs432.6 billion in the preceding year.

Experts attributed the revenue growth to the government policy for keeping higher sales tax rates for import and local supplies of POL products in order to avoid any shortfall in revenue collection.

The Pakistan Bureau of Statistics data showed that the imports of petroleum products drastically fell to $7.6 billion in the fiscal 2015/16 when compared with $11.8 billion in 2014/15. The experts attributed the ease in oil import bill to sharp decline in international oil prices.

The business community, during the last fiscal year, repeatedly urged the government to reduce the oil prices to pass on the benefits of lower international rates to people and industry. 

The Federation of Pakistan Chambers and Commerce and Industry, in a statement, said there was need to pass on the impact of cheaper oil prices onto the electricity tariffs which would have a positive multiplier effect on cost of operation/production of industrial activities, like cement, textile and chemical sectors.

A latest FBR’s notification said the sales tax rate on motor spirit for August was 17 percent, high octane blending component (17 percent), kerosene (5 percent), high speed diesel oil (28 percent) and light diesel oil (8.5 percent).

The sales tax on petroleum, oil and lubricant products, during the fiscal year, witnessed record rates. In December 2015, the government slapped 21 percent sales tax on motor spirit, 23.5 percent on high octane blending component, 22 percent on kerosene, 51 percent on high speed diesel and 24 percent on light diesel oil.

The FBR collected Rs269.76 billion on sales tax (domestic) on POL products in 2015/16 as compared with previous year’s collection of Rs242.18 billion. Similarly, sales tax (imports) grew 32 percent to Rs219 billion as against Rs166 billion. Sharp increase was witnessed in collection of customs duty on import of POL products, which registered 55 percent growth to Rs38 billion in 2015/16 as against Rs24.41 billion in 2014/15.