ISLAMABAD: The government levied Rs7 billion additional tax on oil products on Wednesday to keep their prices unchanged for October and partially make up for Rs63bn revenue shortfall incurred in the first quarter of the current financial year.

“With the approval of the prime minister, it has been decided to keep the prices of all petroleum products unchanged for October,” said Finance Minister Ishaq Dar at a news conference at the Federal Board of Revenue.

Also read: Ogra proposes new petrol, diesel prices

He was briefed on latest revenue collection numbers on his return from the US.

He said Ogra had worked out a reduction of 15 paisa per litre in petrol and Rs2.68 in high speed diesel prices and an increase of Rs2.51, Rs2.63 and Rs2.99 per litre in the rates of light diesel oil, high octane blending component and kerosene, but the government decided not to change prices.

In reply to a question, Mr Dar said he was not aware of the net additional revenue impact or the tax rates on various oil products, but an official close to him said the adjustment in tax rates on various products would yield over Rs7bn in additional revenue in October.

He said the general sales tax (GST) on high speed diesel — the largest transport fuel — had been increased to the highest level yet of 50 per cent from 45pc.

GST on petrol (motor spirit) was also jacked up from 25.5pc to 26pc. Petrol and high speed diesel are the two major products that generate most of the revenue in the oil sector. The HSD sales across the country are over 600,000 tons per month against around 400,000 tons of petrol and HOBC and kerosene less than 10,000 tons.

GST on HOBC, kerosene, and LDO was kept unchanged at 24pc, 30pc and 29.5pc, respectively, but petroleum levy has been reduced.

The official said the decision was taken to recoup some of the revenue losses incurred in the first quarter of the year and to present a healthy picture to the IMF during the next quarterly review in the first week of November. He said the FBR collected Rs584bn during the first three months of the current fiscal year against a target of Rs648bn.

TAX DEADLINES EXTENDED: The finance minister said the last date for filing of tax returns had been extended for a month till Oct 31 on a request of various taxpayer communities, including traders, chartered accountants and businessmen.

He said a meeting of the Economic Coordination Committee had decided to extend till Oct 31 the application of 0.3pc withholding tax on non-tax filers that had been allowed until Sept 30 under an agreement with the traders’ community.

The ECC approved a proposal submitted by the FBR to extend for another month the reduced rate of 0.3pc advance income tax from non-filers, on banking transactions, under Section 236P of Income Tax Ordinance, 2001.

Mr Dar said the ordinance allowed ECC to charge 0.3pc WHT, instead of 0.6pc on all bank transactions beyond Sept 30 as announced in the budget to facilitate positive outcome of talks with the business community.

In reply to a question, he said all those expecting withdrawal of WHT on bank transactions or its permanent reduction to 0.3pc should forget about such a possibility. He, however, promised to remove all difficulties being faced by businessmen.

Published in Dawn October 1st, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play