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CBR opposes Petroleum ministry's move to end duty and sales tax

ISLAMABAD (December 03 2005): The Central Board of Revenue (CBR) has strongly opposed a proposal of Ministry of Petroleum and Natural Resources to withdraw 5 percent customs duty and 15 percent sales tax on import of liquefied petroleum gas (LPG).

Sources told Business Recorder on Friday that both the sales tax and the customs departments have calculated negative impact on revenue collection due to proposed withdrawal of duty and taxes on the LPG import.

In case the government accepted the proposal of the Petroleum Ministry, it would have negative implications. Thus, the CBR has opposed this summary moved to the Economic Co-ordination Committee (ECC) of the Cabinet.

The CBR has collected data from collectors of sales tax as well as customs to ascertain the quantum of duties and taxes collected from the LPG import.

Petroleum Ministry opined that out of 25 million households in Pakistan, 4.3 million are connected with natural gas network; approximately 2 million are using LPG, whereas the rest are relying on conventional fuels like coal, firewood, kerosene, dung cake etc.

Presently near 1500 tons LPG is being produced domestically per day contributing 0.5 percent to the total energy supply mix, which is insignificant as compared to other competing fuels.

There is thus an urgent need to make concerted efforts to increase contribution of LPG in the total energy mix by diversifying its usage in other sectors of national economy.

LPG availability needs to be enhanced to ensure its marketing in the far-flung remote northern, hilly and the rural areas of the country to ensure elimination of unauthorised activities, reasonability in prices, reduce deforestation and mitigate environmental impacts and as well as to bridge the gap between demand and supply of LPG, Petroleum Ministry added.

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