Govt Succumbs to Pressure, Withdraws Advance Tax on Petroleum Dealers

Petroleum dealers have successfully convinced the federal government to reverse the 0.5 percent advance turnover tax on petroleum products. Secretary Income Tax Policy of the Federal Board of Revenue (FBR), Muhammad Sajid Ahmad, clarified in an official memorandum that the tax collection under section 236H does not apply to petroleum dealers or retail outlets, as their income is categorized under the Final Tax Regime. Petroleum dealers argued that the additional 0.5 percent turnover tax constituted double taxation. This position was presented in meetings with key government officials, including Minister of State for Finance and Revenue, Chairman FBR, and Secretary Petroleum Division. Spokesperson Pakistan Petroleum Dealers Association (PPDA) said the dealers support new taxation measures to boost government revenue but the 0.5 percent turnover tax would be detrimental to petrol stations. The resolution of this issue was welcomed by the majority of petroleum dealers, who dismissed a strike call by a small group of Karachi-based dealers. The government appreciated the cooperative attitude of the majority.