Govt nets Rs315 billion from oil taxes

The government is estimated to have earned about Rs315 billion in taxes on oil business during the current fiscal year, making it the single largest revenue-contributing sector. But this contributed to the overall inflationary trends.

Sources in the petroleum ministry told Dawn on Friday the government earned about Rs115 billion as general sales tax on domestic sale of petroleum products during 2009-10 and Rs90 billion was recovered on POL imports.

The total sales collection on petroleum products stood at Rs205 billion.

Likewise, the government netted about Rs108 billion during the current fiscal year on account of petroleum levy on oil products.

Besides, a 16 per cent variable general sales tax on all petroleum products being charged to consumers, the government collected a fixed petroleum levy at the rate of Rs10 per litre on petrol, Rs14 on high octane blending component, Rs6 on kerosene, Rs3 on LDO and Rs8 on high speed diesel.

The government earns on an average about Rs10 billion per month as petroleum levy on five petroleum products, namely high speed diesel, light diesel oil, kerosene, HOBC and petrol.

The government had set a budgetary target to collect about Rs122 billion during the current fiscal year on account of petroleum levy that was originally introduced as carbon tax, but later renamed as petroleum levy when the Supreme Court raised questions about the utilisation of carbon tax.

The petroleum levy target was later revised to Rs110 billion, said the source, adding the actual collection under this head had now been estimated at about Rs108 billion.

The government currently collects about Rs20 per litre on petrol, Rs26 on high octane blending component, Rs15 per litre on kerosene and Rs12 on light diesel oil from consumers.

In addition, about Rs8.91 is paid to the oil companies and dealers on petrol, Rs11.93 per litre on high octane, Rs3.23 per litre on kerosene and Rs4.27 on light diesel oil.

Pakistan’s total sales tax collection during the current fiscal year has amounted to about Rs500 billion, against Rs430 billion in the previous year—an increase of about 16pc.

A senior government official said that higher electricity tariffs and petroleum prices during the outgoing fiscal year had resulted in substantial windfall revenues to the government, although these revenues had a negative impact on the purchasing power of the common people.

He said a robust growth in sales tax collection on POL product imports had been mainly because of massive growth in imports of motor spirit, furnace oil and JP-1 that was higher than the last year’s collection on these products to the extent of 560pc, 45pc and 150pc, respectively.

The sales tax collection from electricity went up by an unusual 40pc during the current fiscal year over last year.

Power tariffs have increased by more than 60pc in 15 months up to April.

This was despite the fact that the nation suffered long hours of loadshedding both in winter and summer.

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