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ISLAMABAD: The Federal Board of Revenue (FBR) has suffered revenue loss of Rs 1.25 trillion during 2022-23 on account of sales tax exemption granted to the petroleum products, according to the new Tax Expenditure Report-2024. The FBR’s Tax Expenditure Report-2024 revealed that more specifically within the largest tax expenditure availing sector of POL products there are four main components namely MS (Petrol), High Speed Diesel Oil, Kerosene and Light Diesel Oil having the greatest share of Sales Tax Expenditure. These four items recorded a growth of 98.66 percent.

The share of these four items is 43.99% in overall sales tax expenditure. It is however appropriate to point out that the said increase of these four major POL items is based on sales tax expenditure calculated for 2021-22 over the period of five months as compared to sales tax expenditure calculated over a period of twelve months for 2022-23 due to the fact that the said four items were zero rated from February 1, 2022 vide SRO 321(I)/2022, dated 01-03-2022. Consequently, Sales Tax expenditure for five months duration (Feb-June) of 2021-22, incurred on aforesaid four POL products was reported as Rs 633.0 billion while sales tax expenditure for entire year (12 month) duration (July-June) of 2022-23, incurred on said four POL products is reported as Rs 1,257.50 billion.

‘Carbon Tax’ on POL products: PM rejects major FBR budgetary proposals

If the sales tax expenditure on these four items is to be compared on twelve monthly bases then the yearly change turns out to be a decline of (17.23%) as calculated in table 8, by taking the five months average sales tax expenditure during 2021-22 and extrapolating over twelve months of the same period.

Copyright Business Recorder, 2024

Copyright Business Recorder, 2024

Comments

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Usman Jul 05, 2024 10:36am
There is no loss to Govt. They are already getting a more than deserved share through ever increasing Petroleum Levy in each drop of Petroleum products.
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Builder Jul 05, 2024 11:46am
And there is no revenue loss from untaxed sectors of economy? I mean, they just twist the words to model a prospective high volume revenue to lost opportunity!
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Khurram Jul 05, 2024 07:40pm
Cut ur defence expenditures if you really want Pakistan make any progress.
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Nadeem Jul 05, 2024 08:50pm
What about the taxes that govt collects on pol like pdl levy, and so many other, the price of pol has at least 100% margin for govt no further 18%. No place left to hide for poor people of Pakistan.
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