Karachi: The Pakistan Petroleum Dealers Association (PPDA) reform panel has successfully convinced the government that the 0.5 percent advance tax on oil sellers was misinterpreted.
A group of dealers held a marathon meeting with senior government officials and assured them that the advance sales tax of 0.5 percent was levied twice while the final income tax of the shops was levied at $1.04 per litre.
Dealers support the government’s new tax measures to increase revenue and cover the fiscal deficit because the target revenue increase will help HPG survive, but explained that gas stations cannot be avoided, PPDA spokesman Hasan Shah said.
The dealers met the Minister of Finance and Taxes Ali Pervez Malik, Chairman Federal Board of Taxes (FBR) Amjed Zubair Tiwana, Petroleum Secretary.
Dealers told government officials that the imposition of sales tax through the Finance Bill 2024-25, passed by Parliament and approved by the President of Pakistan, has allowed this anomaly to be resolved.
The new sales tax could hamper oil retailers, dealers said, as gasoline pumps have been weak and record inflation has hampered retail sales.
Hasan Shah said on July 05 that the Ministry of Energy (Department of Petroleum) has asked the FBR to clarify the application of Section 236H of the Income Tax Act.
In his reply to the Energy and Mineral Resources Ministry, FBR Income Tax Policy Secretary Muhammad Sajid Ahmad explained the tax collection under Section 236H in his office memorandum (C.No.1(6)S(ITP)/2019/123126-R). It does not include dealers / retail stores as their income is subject to the rules of the Final Tax.
According to Hasan Shah, about 95% of dealers in Pakistan have ignored the nonsensical strike call by some Karachi-based dealers known for their links with the Oil Marketing Company. The government officials involved were happy with the positive attitude of the dealers.
“We have found the Ministry and all officials of the Ministry, OGRA, FBR patients, tolerant and cooperative and we hope they will continue to cooperate with us in the future,” said Hasan Shah.
The withholding tax issue has been resolved and the oil traders will work for their rights through talks with official circles, Shah said, talks are better than political demonstrations.
