CNG stations: FBR demands higher taxes, says industry leader

Court had cut tax rate to 17%, but FBR formula has an impact of 32%.

ISLAMABAD: Compressed natural gas (CNG) station owners have expressed reservations about what they call illegal collection of higher sales and income taxes from the industry, saying it could compromise its ability to run the business and serve consumers.

“The Federal Board of Revenue (FBR) has been illegally collecting enhanced sales tax and income tax from the CNG industry,” said Ghiyas Abdullah Paracha, an industry leader associated with the CNG business, in a statement issued on Tuesday.

Paracha pointed out that a delay in addressing the tax issue would exacerbate problems for all stakeholders and, therefore, it must be resolved on a priority basis.

He said the Supreme Court of Pakistan had directed the government to slash sales tax on the CNG industry from 26% to 17%, but it was not followed. Rather, a deceptive formula was introduced that showed sales tax at 17% but its impact on CNG station operators was not less than 32%.

Citing examples, Paracha stressed that some sectors had been exempted from taxes while others were getting relief in one form or other, but the CNG industry that paid taxes in advance was being pushed to the wall.

“The CNG sector wants to pay taxes the way other sectors are contributing, which will end discrimination,” he said.

Published in The Express Tribune, August 5^th, 2015.

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