ISLAMABAD: A rise in taxes on import of edible oil in next financial year’s budget for 2018-19 has been requested by the Federal Board of Revenue.
The proposal put forth envisaged a rise in federal excise duty from 16 percent to 21.5 percent and levying of 1 percent income tax at import stage on edible oil, a senior government official said, reported Express Tribune.
But the proposal put forth by FBR has been rejected by the federal cabinet and directed the tax regulator to review its recommendation and submit it again for inclusion in Finance Bill before the unveiling of the budget on April 27th.
It also sought an increase in excise duty on import of cooking oil, ghee, vegetable and edible oil from 15 to 20 percent in Federally Administered Tribal Areas (FATA). And this recommendation was also rejected by the cabinet and directed FBR to provide a fresh proposal at the time of budget announcement for its inclusion into the Finance Bill.
As per an official of the Ministry of Industries and Production (MIP), local ghee and oil manufacturers were urging the government to reduce taxes on vegetable oil imports to provide protection to the industry.
The cabinet was told that 16 percent excise duty was levied on cooking oil, ghee, vegetable and edible oil under First Schedule of the Federal Excise Duty (FED) Act 2005.
Also, a fixed excise duty of Rs1 per kg was levied on cooking oil, ghee, vegetable and edible oil as per a Statutory Regulatory Order (SRO) enacted in January 2006.
And an additional 5.5 percent minimum income tax was also applicable on cooking oil, ghee, vegetable and edible oil but Fata was paying 15 percent excise duty.
However, the Senate had in its recommendations for Finance Bill 2017 suggested a rise in excise duty from 16 to 21.5 percent and 1 percent income tax at import stage.
The tax watchdog accepted the recommendation for giving an equal playing field for ghee and oil producers in tariff areas linked to their counterparts in non-tariff areas.
Source Pakistan Today