In protest: Oil tanker associations disagree about new tax

The OTCA threatens to go on strike next week.

KARACHI: Sindh could face a petrol shortage as the Oil Tankers Contractor Association (OTCA) threatened to go on strike next week. The All-Pakistan Oil Tankers Association, however, dismissed the grievances and said that it will not let the strike occur.

OTCA chairperson Haji Zarwali issued this warning in the wake of the Sindh government's announcement that it would levy a five per cent sales tax on each oil tanker passing Karachi. "This is illegal," he declared during a press conference on Tuesday. "Oil is a federal matter, so how can the provincial government impose a tax on us?"



Lashing out at the provincial government, Zarwali said it was only the Sindh government that had imposed the tax. "The other three provinces have no such tax," he said. "We take hardly six to seven per cent in commission on each container and give 2.5 per cent in tax to the federal government already."

He said that after the imposition of this new tax, they would be paying a total of 7.5 per cent in tax. "It would be useless for us to run our vehicles then," he claimed. "We also give a token tax of around 17,000 every three months, a yearly permit tax of Rs2,200 and income tax of around 13,000 twice a year." He added that as the tax was on the oil that they were carrying, it should be imposed on the oil companies and not the contractors.

All-Pakistan Oil Tankers Association general secretary Akram Khan Durrani, however, was of the opinion that since the major oil companies were located in Karachi and the port city was the hub of their business activities, it was the right of the Sindh government to impose this tax.

Refuting Zarwali's claim that the contractors' commission amounted to six to seven per cent, Durrani said that they charged 10 per cent and were planning to increase it to 11 per cent. "We do not want a strike and we will not let it happen," he added.

Published in The Express Tribune, January 28^th, 2015.