Following successful negotiations between the government and the Pakistan Petroleum Dealers Association, the Federal Board of Revenue announced on Friday night that petrol pumps would not be subjected to additional taxes.
In a memorandum, the FBR clarified that the provisions of tax collection under Section 236H would not apply to dealers and retail outlets of oil marketing companies (OMCs). This decision was based on the understanding that income from these outlets falls under the Final Tax Regime as per Section 169 of the Income Tax Ordinance, which constitutes a comprehensive discharge of tax obligations.
The Petroleum Division had initially approached the FBR seeking clarification on the exclusion of OMCs from the purview of Section 236H. The FBR underscored that petroleum dealers operate within a regulated sector with fixed margins, and any income tax liability is effectively addressed through existing tax regulations under Section 156 of the Income Tax Ordinance.
The Directorate General Oil intervened following complaints from petroleum dealers and retail outlets, highlighting the challenges they faced after Section 236H was extended to all sectors of the economy under the Finance Act.
Upon hearing the FBR’s decision, the PPDA expressed gratitude to the authorities involved, including the Secretary of the Petroleum Division and the Chairman of the Oil and Gas Regulatory Authority (OGRA), for their cooperation in resolving the issue.
This resolution marks a significant step in alleviating financial pressures on petrol pump operators and ensuring clarity regarding their tax obligations within the regulatory framework. It reflects collaborative efforts between industry stakeholders and governmental bodies to streamline tax policies in alignment with sector-specific considerations.
