LAHORE: While condemning yet another jump in rates of petroleum products on the eve of the new year, the Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel has called for reducing tax ratio on oil products to support the trade and industry, as the government has raised the Petroleum levy, besides increasing GST on petroleum products under the commitment with the IMF.
In a statement issued here on Saturday, Mian Anjum Nisar, observed that with a view to improve the cash flow of businesses at this crucial time, the government will have to facilitate the industry through reduction in tax ratio on all items including the oil products, besides lowering the mark-up rate, as the country’s economy is going through a challenging phase of post-Covid-19 pandemic. He said that at a time when GDP ratio was very nominal amidst high cost of doing business, the industry needs maximum support and relief.
He said that it is unfortunate that the PL rate on petrol is raised to Rs17.62 per litre from Rs13.62 per litre and on HSD is also revised from Rs13.14 to Rs17.14 per litre while on SKO is increased to Rs9.86 per litre.
He lamented that the GST on petroleum products has been increased to 4.77 percent from 1.63 percent on petrol, the HSD rate also increased to 9.08 percent from 7.37 percent. In addition, the GST on SKO and LDO were also revised upward.
BMP Chairman observed that business-friendly policies should be adopted as other neighbouring countries of the region are giving to the industry. He said that sizeable cut in oil rates would certainly bring down the cost of doing business and our products would get their due share in the global market.
He called upon the government to address the key issues of the trade and industry, facilitate the economic growth along with improving tax revenue of the government. He said that the impact of COVID-19 has badly affected business and industrial sector, stressing the government to bring down GST in order to ease the difficulties of businesses.
He said that the move would reduce the cost of doing business, attract new investment, promote industrialization and create new jobs. The FPCCI leader said that the government has made unprecedented increase in the ratio of tax, duty and Petroleum Levi ostensibly to earn billion of rupees in revenue.
He called for uninterrupted and low cost gas supply to the industrial sector, urging the government to up-grade transmission and distribution system to ensure continuous and smooth supply of electricity and gas. He urged the government not to tolerate any laxity towards up-gradation of gas and power transmission and distribution system, as any negligence could cause unbearable loss to the trade and industry. He said that gas and electricity are basic ingredients for the industrial sector and are must to keep the wheel of industry moving. He said that growth of local industry is a barometer of economy.
Anjum Nisar said that oil prices and inflation are closely connected in a cause-and-effect relationship. As fuel rates move up, inflation, which is the measure of general price trends throughout the economy, follows in the same direction upward. He said that inflation is on higher side due to the impact of government’s economic policies of soaring fuel rates, enhancing power and gas tariff and depreciating the local currency.
Instead of providing subsidies or waivers, it is unjust to overburden the industries with hike in cost of production. An increase in petroleum products costs will further weaken the economic environment which is already under threat on various fronts.
FPCCI former chief and BMP Chairman said the high speed diesel is used mostly in the transport and agriculture sectors. Therefore, any increase in its price will lead to inflationary impact. Kerosene oil price has also gone up, which is used in remote areas where liquefied petroleum gas is not available for cooking purposes. So, any increase in its price will have an impact on the life of the poor. The price of light diesel oil has also been hiked, which is used in industries.
Copyright Business Recorder, 2022
Comments
Comments are closed.