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.
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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
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