Withdrawal of one percent surcharge on E&P companies imports sought

Pakistan Petroleum Exploration and Production Companies Association (PPEPCA) has protested with the Central Board of Revenue (CBR) over slapping of 1 percent surcharge on exploration and production E&P companies imports. It also demanded of chairman Abdullah Yusuf to honour his commitment for exempting oil and gas sector from this new tax.
In its letter, PPEPCA reminded the CBR chief that in a sheer contrast, to his assurance, customs authorities were collecting newly slapped special surcharge from oil companies on their all imports from June 10.
It may be noted that CBR chairman Abdullah Yusuf had given a categorical assurance to PPEPCA members at a post-budget seminar organised here by Institute of Chattered Accountants and Rawalpindi-Islamabad Tax Bar Association that 1 percent special surcharge was not applicable on E&P companies' imports.
PPEPCA cheered at CBR chairman's announcement and gave him big applaud, but PPEPCA's happiness soon turned soar when its members started informing it in writing that customs authorities were collecting 1 percent special surcharge from them.
They demanded of PPEPCA leadership to take-up the matter immediately with CBR chairman and get any order for seeking exemption if it was really granted for oil and gas sector from the newly slapped special surcharge. PPEPCA took its members complaints and wrote a letter to CBR Chairman Abdullah Yusuf.
It said, "PPEPCA would appreciate if the matter is clarified to this effect for non applicability of the surcharge on E & P companies' imports."
PPEPCA wants the CBR chairman to keep up his words and exempt E&P companies all kinds of imports from surcharge.
Oil and gas sector is a big hope of the government for securing investment in Pakistan. Any new tax will not only slow down investment in this sector but also discourage the new comers to prefer Pakistan for investment.
Abdullah Yusuf, one with the oil and gas sector background, will have better idea how dishonouring of his commitment for special surcharge will effect E&P companies.
E&P companies always prefer to go to that country for investment where they get a simple procedure and duty free import of oil and gas equipment, materials and oil and gas field services.
Basically it's the job of Director General Petroleum Concessions (DGPC) of the ministry of Petroleum to make sure that E&P get a conducive atmosphere and they do not get any hurdle in their operation.
But unfortunately they are not getting due support from DGPC. Many multinationals are now approaching directly to minister Amanullah Khan Jadoon and Petroleum secretary Ahmed Waqar, for solution of their problems. Petroleum Policy 2007, is its typical example. DGPC was the supposed was submit final draft to the federal cabinet in May as was announced by prime minister Shaukat Aziz himself at a seminar but his commitment is yet to be honoured by the DGPC of the ministry of Petroleum.