In a move aimed at providing relief to consumers, the federal government has announced a reduction in the sales tax rates on the supply of petrol and high-speed diesel (HSD).
The decision, outlined in the Federal Board of Revenue’s (FBR) SRO 1327(I)/2021 dated October 7, 2021, revises the sales tax rates on petroleum products.
According to the latest notification, the new sales tax rates are as follows:
1. Sales tax rate on petrol supply has been reduced to 6.84 per cent from 10.54 per cent.
2. Sales tax rate on high-speed diesel (HSD) has been reduced to 10.32 per cent from 11.64 per cent.
The rates of sales tax on the supply of kerosene oil and Light Diesel Oil (LDO) remain unchanged at 6.70 per cent and 0.20 per cent, respectively.
This adjustment follows the government’s previous notification, SRO 1225(I)/2021 dated September 18, 2021, where changes in sales tax rates were first introduced. The reduction in sales tax rates is seen as a proactive measure by the government to ease the burden on consumers, especially in the wake of rising international oil prices.
The federal government had previously announced an increase in petroleum prices on September 30, 2021, citing a significant surge in global oil prices. In a press conference held the day after the price hike announcement, Finance Minister Shaukat Tarin defended the decision, highlighting the government’s efforts to absorb the impact of the highest global price hike in a decade.
Minister Tarin emphasized that the government was taking various measures, including direct food subsidies for the poor, to mitigate the impact of rising prices on the public. He acknowledged the global economic challenges brought about by the Covid-19 pandemic, stating that as Pakistan is an importer of essential commodities, it has been affected by the global price increases.
The Finance Minister assured that the government had not passed on the full impact of the global price hike to the people, and efforts were being made to manage the situation while protecting vulnerable segments of the population. The reduction in sales tax on petrol and diesel is a continuation of these efforts to provide financial relief to the public in the face of challenging economic conditions.
