The Federal Board of Revenue (FBR), which is already facing hardships to meet its budgetary target in the ongoing economic turmoil mainly because of floods, has completely failed in persuading the oil refineries to pay turnover tax, Business Recorder learnt on Saturday.
Sources said the board has revised upward the turnover tax from 0.5 percent to 1 percent in budget 2010-11 to achieve its annual revenue target successfully. But the said revision appeared to be fruitless as the oil refineries, which are presently encountering with liquidity problems, have declined paying turnover tax, even at the previous rate.
They said the top brass of the board had also offered the oil refineries the option to pay turnover tax at previous rate but the oil refineries are reluctant to pay a single penny on account of turnover tax, which forced the FBR to remain unsuccessful in hitting the first quarter mark.
They said the revenue body had further granted turnover tax exemption to the oil marketing companies (OMCs) on HSD, which was subjected on the provision of relevant documents ie sales and margins on petroleum products to the tax department.
But the OMCs not only turned down this offer but also demanded to reduce the said levy from 1 percent to 0.25 percent at all petroleum products including petrol, kerosene, jet fuel and high octane, sources said. Sources said that the OMCs were of the view that they are getting only Rs 1.35 margin per litre and the revised turnover tax would cause to shrink their profits by around 50 percent. Replying to a question, they said that although the OMCs have paid the turnover tax at previous rate, the oil refineries have declined paying turnover tax even at previous rate, rationalising that they have insufficient funds to pay the said liability.
Comments
Comments are closed.