Tax exemption on imported gas sought

ABDUL RASHEED AZAD

ISLAMABAD: The Ministry of Petroleum and Natural Resources has asked the Federal Board of Revenue to exempt imported gas from customs duty and sales tax to reduce the cost.

The ministry forwarded and discussed these points with the FBR officials on Wednesday, November 16 in a high level meeting chaired by Ejaz Chaudhry Secretary Petroleum, which was also attended by other high-ups.

Official sources at the ministry told Business Recorder that Pakistan was facing severe gas shortage and the government was working on three important imported gas projects including Turkmenistan-Afghanistan-Pakistan-India (TAPI), Iran-Pakistan (IP) and Liquefied Natural Gas (LNG).

"We have asked the FBR to exempt low BTU gas from taxation so that we could reduce the cost of the imported gas for general public. The ministry has also requested the FBR to exempt from withholding tax imported machinery required for the construction of the projects," the sources added.

When the officials asked about such tax exemptions for any other project, they maintained that the FBR was already providing same facilities to Independent Power Plants (IPPs).

The FBR has assured the ministry that it would take every step to facilitate gas consumers in the country, the official added.

He said Pakistan needs huge finances to build infrastructure for imported gas. It includes import of machinery and equipment for laying gas pipelines. They said total cost of the TAPI project is nearly $8 billion, IP will cost $1.5 billion and laying of LNG pipeline from Karachi to Lahore would require nearly $2 billion.

Officials added that the government has to provide incentives to foreign as well as local investors so that the projects could be completed in time.