5.839 billion rupees!

5.839 billion rupees!

ISLAMABAD: The incumbent government has collected Rs 5.839 billion federal excise duty on petroleum products during 2011-12 from Rs 5.120 billion in previous years with an increase of 14 percent.

Well informed sources told Online that petroleum products are the highest source of sales tax and contributed more than forty three percent of the total sales tax during 2011-12. The sources told that petrol (MS) is the leading source of sales tax at the import stage and the sales tax on petroleum products recorded a growth of 42.3.Sources informed that apart from the tax collection on petroleum products, government is earning billion of rupees through custom duty these products as import bill of these products has been exceeded from 15 billion dollar in 2011-12.

The source also apprised that total collection of taxes including general sales tax and federal excise duties stood at more than Rs 330 billion during 2011-12 showing increase of 14% as compared to the previous years.Sources said that although government has no control over rise in international oil prices but what can do it to exempt the retail price of POL products from taxation to provide maximum relief to the price stricken masses of the country. Every rise in petroleum prices brings more profits to the oil companies and more revenue to the government exchequer at the cost of consumers.

Every increase in price gives an opportunity to the government to raise the collection from general sales tax, custom duties and federal excise duty while hike in these taxes are born by the consumers, source added.The source said that the weekly inflation price revision is causing an inflation impacts which is detrimental to the national economy and industrialists suffered million of rupees loss due to the weekly revision mechanism as it kept costs of production variable.

Pakistan is developing country and the weekly price determination mechanism was not practical as it only suited developed economies. Government should keep the diesel price comparatively lower as it was used as an input for industries and agriculture. Such price variations might be absorbed by the taxes levied on petroleum products to keep the prices stable. – Dawn