The Federal Board of Revenue’s (FBR) sales tax collection would suffer massive revenue loss in 2021-22 after withdrawal of sales tax on crude oil and replacing its status with the zero-rating.

FBR officials told Propakistani that one of the reasons for low domestic sales tax collection during July-Feb (2021-22) is the changes in the status of crude oil. The zero-rating to crude oil, which was withdrawn through the Finance Act, 2021 was restored from January 16, 2022. This would have serious revenue implications over the sales tax collection during the period under review. The revenue loss would be over Rs. 60 billion per month due to zero-rating of crude oil.

The applicability of a zero-percent sales tax on all petroleum products would also cause a revenue loss of Rs. 200 billion revenue loss during the March-June period of 2021-22.

According to a tax expert, in the last budget, 17 percent sales tax was imposed on crude oil which was an adjustable tax. In the last budget, a 17 percent sales tax was imposed on crude oil. It was an adjustable tax, but the FBR has been able to have funded through the imposition of this tax on crude oil. Now its status has been changed to zero-rating, he added.

Source:: Radio Pakistan