The Federal Board of Revenue (FBR) has raised over Rs287 billion from petroleum products, in indirect taxes, during the first seven months of the current fiscal year -up by 72%, indicating that petroleum products still remain a key source for revenue generation.
The taxes were collected from July to January of fiscal year 2021-22 on account of customs duty and general sales tax, showed the figures compiled by the FBR. Although the customs duty rates remained unchanged after the government doubled those in the budget, Prime Minister Imran Khan shifted the sales tax rates during fortnightly reviews of the prices. But still, the government has pooled Rs287 billion under the heads of customs duty and sales tax on petrol, crude oil, high-speed diesel and furnace oil.
The collection was Rs120 billion or 72% higher than the corresponding period of the previous fiscal year. During the first seven months of the ongoing fiscal year, the country spent Rs1.4 trillion on the import of four petroleum products -which was Rs750 billion or 120% higher than the comparative period of last fiscal year. The data suggested that the taxation on petroleum products along with the increase in their prices in the international market remained key factors behind record per litre price hike in petrol and high-speed diesel.
Prime Minister Imran Khan deferred the proposed increase in the petroleum products’ prices with effect from February 1 and instead, called for reduction in the petroleum levy and sales tax rates. The sales tax on petrol has been further slashed to Rs0.79 per litre against the standard 17% while it is reduced to Rs3.17 per litre on high-speed diesel. However, one of the major reasons behind the higher collection was the imposition of 17% sales tax on crude oil at the import stage and increase in customs duty on import of petrol from 5% to 10% in the budget.
The government has not changed these rates since June. The seven-month customs duty collection on the import of these four petroleum products stood at Rs84.4 billion -higher by Rs48 billion or 133%. Similarly, the sales tax collection at the import stage on these items also increased to Rs163 billion against last year’s figure of Rs70 billion. In addition to that, Rs40 billion sales tax was also collected at the local stage, which was 35% lower than previous year because of change in taxation from domestic to import stage in the budget. The Rs287 billion collection was equal to 8.5% of the total taxes that the FBR collected during the July -January period.
