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Boosting oil & gas sector: Cut in minimum turnover tax proposed

Boosting oil & gas sector: Cut in minimum turnover tax proposed

ISLAMABAD: The Federal Board of Revenue (FBR) is mulling a budget proposal over, seeking reduction in minimum turnover tax in the upcoming budget for 2014-15 to boost the oil and gas sector.

As per details, the Finance Division has forwarded the budget proposal of the Sub-Group of the Economic Advisory Council (EAC) on Energy to the FBR for consideration in the budget for the next financial year. The proposal is pertaining to minimum turnover tax being scrutinised by the FBR.

The Sub-Group of EAC on Energy has proposed reduction in minimum turnover tax to 0.2 percent for all oil and gas sector.

Moreover, the Petroleum and Natural Resources Ministry said that a reference had been already sent to FBR, proposing change in the definition of turnover in line with Ogra (to exclude cost of gas from turnover). Similar, dispensation can also be considered for refineries and oil marketing companies (OMCs).

Similarly, the second proposal is regarding reduction in tax rate to 30 percent for exploration and production (E&P) companies, OMC and gas companies as is applicable to all other corporate sector. The Petroleum Ministry has endorsed the proposal and has asked Implementation and Economic Reforms Unit (IERU) to seek the FBR comments on it. The Finance Division has further requested the FBR that the comments / input of FBR may be shared with IERU as the fourth meeting of the EAC is scheduled for May 14 (Wednesday) under the chairmanship of Minister for Finance to discuss the aforementioned proposals of the sub-group of EAC.