Latest news with #Rs370
Express Tribune
16-04-2025
- Business
- Express Tribune
Govt turns down additional freight charges proposal
Listen to article The federal government has scrapped the proposal of collecting additional freight charges to ease financial pressure on the oil industry by raising the petroleum levy on oil products to fund canal and road projects in Balochistan. The petroleum levy has been recently increased on petrol by Rs16.66 per litre and on high-speed diesel by Rs15.65 per litre to collect funds for implementing road and canal projects worth Rs370 billion in Balochistan. Now, the total levy on petrol is Rs86.66 per litre and on diesel it is Rs85.65 per litre. Among other petroleum products, the levy stands at Rs80.17 per litre on high octane blending component, Rs18.95 per litre on kerosene oil, Rs15.37 per litre on light diesel oil and Rs60.17 per litre on E-10 gasoline. According to sources, oil refineries and marketing companies have estimated that they will suffer a Rs34 billion loss during the current financial year due to sales tax exemption. To reduce pressure, the Oil Companies Advisory Council (OCAC) – an industry lobby – has called for addressing the sales tax exemption issue. In its proposals to the Federal Board of Revenue, the OCAC pointed out that the Finance Act 2024 had introduced sales tax exemption on petrol, high-speed diesel, kerosene oil and light diesel oil. These fuels were previously zero-rated that allowed input tax claims. However, with the exemption, the input tax has started accumulating. Since prices of these petroleum products are regulated by the government, the denial of input tax has increased the industry's operating and infrastructure costs. Its impact for tax year 2025 is estimated at more than Rs34 billion. Sources said that the oil industry, in consultation with the Petroleum Division, had worked out a proposal, according to which Rs4 per litre would be adjusted in the inland freight equalisation margin (IFEM), which would be passed on to refineries to offset the loss caused by sales tax exemption. The Petroleum Division also prepared a summary for presentation to the prime minister and other relevant forums for approval. However, the government turned down the proposal of Rs4-per-litre adjustment in IFEM, prompting an outcry from the oil industry. The industry has also approached the government for abolishing the super tax and other levies. It underlined the need for addressing the sales tax exemption matter in the federal budget for 2025-26 to help the sector operate smoothly. OCAC proposed that petroleum products should be again placed under the taxable regime to ease the burden. It argued that global and domestic economic pressures had already strained formal businesses. The super tax, originally a one-off levy, has continued to remain in place, which threatens the viability of documented companies. OCAC called for its removal in 2025-26. The industry body also objected to the minimum tax levied under Section 113 of the Income Tax Ordinance, citing that prices and margins for petroleum products were fixed by the government. These margins encompass establishment, development and operating costs, yet the current minimum tax consumes roughly 16% of the fixed margin of oil marketing companies. It recommended reducing the minimum tax applicable to refineries and OMCs to 0.25%.
Express Tribune
07-02-2025
- Automotive
- Express Tribune
NHA doubles its toll on the pocket
KARACHI: For a supplier regularly using a highway for transporting goods between cities, the toll tax is an operating cost necessary to maintain the regular operations of a business. However, when this toll tax is increased within a matter of days, it can inevitably drive the business into a state of loss. For instance, Muhammad Nawaz, who supplies milk from Hyderabad to Karachi, claimed that he paid Rs220 extra within two days. "Toward the end of January, I was charged Rs860 for my Mazda truck at Toll Plaza Hyderabad however, this month, I had to pay Rs1,080 for the same vehicle on the same route," said Nawaz. Similarly, Khushi Muhammad, a resident of Karachi, revealed that he traveled to Hyderabad frequently on his car. "I used to pay Rs370 as toll tax till the end of December, but now I have to pay Rs470. Within two to three days, the toll tax has been increased by Rs100," lamented Muhammad. In the first week of January, the government and opposition members of the Sindh Assembly had jointly passed a resolution in which they expressed their concerns over the increase in toll tax on highways and motorways managed by the NHA, terming it an injustice to the people of the province who were already battling inflation. After the increase in toll tax, a commuter travelling from Karachi to Hyderabad or Sukkur via the highway would have to pay at least Rs2500 per vehicle in toll tax. Simultaneously, other members complained about the poor, accident-prone condition of highways managed by the NHA and the delays in the construction of the Hyderabad-Sukkur Motorway. On the other hand, the National Highway Authority (NHA) has claimed that it spends more money on the repair and maintenance of highways and motorways in the province than it earns through the collection of toll tax. Reportedly, NHA meets all its expenses from its own resources and the revenue generated from toll tax is the organization's largest source of income. In light of this, NHA officials have recently hoped to multiply this revenue by increasing the toll tax rates. In total, 29 toll plazas are already operational across Sindh. NHA's Director of Public Relations Mazhar Hussain told The Express Tribune that the NHA collected a total of Rs6.85 billion in toll tax revenue from Sindh for the financial year 2023-24, while it spent Rs8.9 billion on road maintenance and repair during the same period. "The NHA does not receive funds from the government for the maintenance and repair of roads due to which it depends largely on its own resources. Therefore, in order to maintain the road network spanning 13,600 kilometers across the country, it had to increase the toll tax and number of toll plazas," revealed Hussain, who further disclosed that the NHA hoped to increase its overall revenue from Rs60 billion to Rs110 billion in the current financial year. "The NHA has recently established a new toll plaza near Umerkot in Mirpurkhas district. Under the policy, a toll plaza can be built at a distance of 35 to 60 kilometers on highways. The repair of the Karachi-Hyderabad Motorway will start in February," affirmed the NHA spokesperson. Provincial Minister for Planning and Development Syed Nasir Hussain Shah assured that the Sindh government will place the concerns of the members of the Sindh Assembly before the federal government and recommend that they be resolved immediately. "Not only the members of the assembly but also the common people are worried about the poor condition of the Karachi-Hyderabad Motorway, which needs to be improved. The Sindh government is also concerned about the delay in the construction of the Hyderabad-Sukkur Motorway," claimed Shah.
