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Tag: sales tax rate

  • FBR slashes tax rate on petrol sale

    FBR slashes tax rate on petrol sale

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday reduced rate of sales tax on supply of petrol (Motor Spirit).

    The revenue body issued SRO 1072(I)/2021 to make change in sales tax rate on supply of petrol.

    According to the notification the sales tax rate on supply of petrol has been reduced to 10.54 per cent. The FBR brought down the sales tax rate from 10.77 per cent. Previously, the revenue body notified the sales tax rate on petroleum products through SRO 937(I)/2021 dated July 26, 2021.

    The uniform rate of sales tax is 17 per cent. However, the government has reduced the rate of sales tax on various petroleum products in order provide relief to the masses.

    Despite providing relief to general public through reduced rate of sales tax, the government increased the prices of various petroleum products with effect from August 16, 2021.

    The government has increased the prices of kerosene oil and Light Diesel Oil (LDO) for next fortnight effective from August 16, 2021.

    The prices of kerosene oil have been increased by Rs0.81 per liter, from Rs87.49 to Rs 88.30.

    Likewise, the prices of Light Diesel Oil (LDO) have been increased by Rs1.10 per liter from Rs84.67 to Rs85.77.

    However, the government kept prices of petrol and diesel unchanged with effective form August 16 for next fortnight.

    According to the latest notification, the FBR has kept sales tax rates at reduced level for other petroleum products. However, sales tax rate on high speed diesel is remained at 17 per cent.

    The sales tax rate on supply of kerosene oil is 6.70 per cent and on supply of light diesel oil is 0.20 per cent.

    FBR reduces sales tax rate on petrol to 10.77%
  • PTBA suggests 5-year policy for gradually reducing sales tax rate

    PTBA suggests 5-year policy for gradually reducing sales tax rate

    KARACHI: Pakistan Tax Bar Association (PTBA) has suggested gradually reduction of sales tax rate under five-year policy and for first year the sales tax rate should be brought down to 15 percent from next fiscal year.

    In its budget proposals for 2019/2020, the PTBA said that present rate of Sales Tax at 17 percent with 3 percent value addition tax on commercial importers is too high.

    It said that there is a narrow tax base due to the high rate which induces tax evasion, under invoicing, corruption and smuggling.

    The PTBA proposed that this year as a first step Sales Tax Rate may be brought down to 15 percent and five year policy may be announced for reduction of rate of tax by 1 percent every year.

    Moreover, same rate of value addition tax (i.e., 3 percent) may be levied on luxury goods which are expected to be sold at a higher value addition in the local market as compared to other goods.

    “Higher value addition tax should be levied on import of luxurious items such as cosmetics, shampoos, cars, etc.”

    It said that the proposed amendments would assist in the expansion of tax base, reduction in smuggling and corruption, rise in government revenues and increased competitive edge and promotion of documentation of economy.

    Furthermore, the reduced tax rate will encourage the unregistered persons to get themselves registered, resulting in broadening of tax base.

    Higher value addition tax on luxury goods will not only generate additional revenue but will discourage import and also support the local industry.

  • KTBA suggests full fledged VAT, reduction in sales tax rate to 10pc

    KTBA suggests full fledged VAT, reduction in sales tax rate to 10pc

    KARACHI: Karachi Tax Bar Association (KTBA) has suggested the tax authorities for introduction of full fledged value-added tax (VAT) and reduction of sale tax rate up to 10 percent in order to discourage under invoicing, corruption and smuggling.

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