Federal Planning and Development Minister Asad Umar has said that the government has decided in principle to reduce the edible oil price by forty-five to fifty rupees per litre.
Addressing a news conference on Monday, the minister said this will be achieved by reducing taxes on the edible oil. Sales tax on edible oil will be cut from 17 percent to 8.50 percent, customs duty per tonne to be halved and additional customs duty will be abolished. Asad Umar said a programme has been prepared to extend targeted subsidies on essential commodities to the marginalised segments of the society. He said Prime Minister Imran Khan will share details of this programme in the next few days whilst the benefit of this programme will start reaching the people by the end of next month.
The minister said the government has also substantially reduced taxes on petroleum products in order to pass on the minimum impact of their increase in the world market. He pointed out that crude oil prices witnessed an increase of 81.55 percent over the last twelve months in the global market whilst in Pakistan, the prices were only enhanced by 17.55 percent.
He said, “We have reduced GST from seventeen percent to 6.8 percent and the Petroleum Development Levy from Rs30 to Rs5.62 per litre on petrol.” He said the sales tax on diesel has been reduced from 17 percent to 10.03 percent and the petroleum development levy from Rs30 to Rs5.14 per litre. He said the world is passing through a critical and extraordinary period of extremely high commodity prices and Pakistan is no exception, hoping that the prices might start receding from March next year. “The situation might remain same till March 2022, however as per projection of the international experts the prices of the commodities might start receding to normal level from March to June next year”, he added.
While recalling the tax rates on petroleum products during previous government led by PML-N, Asad Umar said that the then government had charged tax worth as high as Rs101 per litre and average of Rs52 per litre during the whole tenure, but now it was less than half of the average tax of previous government, adding that at some stages, the present government had to charge zero PDL to pass on maximum relief to the people.
The minister said Prime Minister Imran Khan had already provided maximum relief in terms of taxes on the petroleum products and henceforth there would be little room in this regard. Rejecting the perception that per capita income in other countries especially in India and Bangladesh is higher therefore their purchasing power was also good, Asad Umar pointed out that poverty rate in Pakistan was far lower compared to India and Bangladesh which meant that the purchasing power in Pakistan was comparatively better.