In terms of sales tax, FBR suffers losses worth Rs30bln on petroleum products

According to the media reports, the minimized consumption of petroleum products is past four months has incurred losses worth Rs30 billion in terms of sales tax on petroleum products to the Federal Board of Revenue (FBR).

The FBR estimated the losses mainly due to lower consumption and massive reduction in oil prices.

The FBR sources said sales tax collection from petroleum products fell 23 percent to Rs98 billion from March to June. That compared with Rs128 billion collected during the corresponding four months a year earlier.

The lockdown following the coronavirus outbreak in March brought economic activities to a grinding halt, while consumption of petroleum products also waned during the period.

Sales tax collection from petroleum, lubricant and oil products has been consistently declining since the lockdown imposed in late March. Although the lockdown has been partially lifted, oil shortage surfaced due to declining reserves in the country.

The sales of petroleum products fell 12 percent to 1.48 million tons in May. That compared with 1.67 million tons in the same month of the last year.

Shortfall in sales tax collection from POL products has been estimated at around Rs7 billion in June.