Pakistan Tightens Checks on Petroleum Levy Collection

Pakistan Tightens Checks on Petroleum Levy Collection

Karachi, September 5, 2023 – Pakistan has taken significant steps to enhance oversight and control over the collection of petroleum levy, signaling a move towards more transparent and efficient revenue collection in the petroleum sector.

The Federal Board of Revenue (FBR) has played a pivotal role in this initiative by issuing SRO 1185(I)/2023 on Tuesday, which outlines measures to monitor the sale of petroleum products for the Petroleum Development Levy (PDL).

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Under Sales Tax Rules, 2006, the FBR has introduced a mandatory requirement for registered suppliers to furnish detailed information about the buyers of petroleum products. This information includes:

  1. National Tax Number (NTN)
  2. Computerized National Identity Card (CNIC)
  3. Full Name

Additionally, the provided details should encompass the quantity and value of the sale, the rate of PDL per liter, and the amount of PDL payable. These measures are aimed at improving transparency and accountability in the petroleum levy collection process.

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Furthermore, the FBR has emphasized the use of technology to streamline the collection process. It has directed that the date of sales must be automatically retrieved through Annexure – C by utilizing the Harmonized System (HS) code for petroleum product sales. This will facilitate accurate calculations of the PDL amount that is payable.

The FBR has also stressed the importance of calculating the PDL based on government-notified per liter rates relevant to the specific period. These rates are expected to be updated promptly to align with current market conditions.

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These measures are seen as a significant step towards ensuring the fair and efficient collection of petroleum levy, while also minimizing opportunities for tax evasion and fraud in the petroleum sector. The move is expected to contribute positively to Pakistan’s revenue collection efforts and promote greater transparency in the country’s financial systems.