In response to the breakdown of negotiations with the government over a turnover tax that the dealers view as unjust and unconstitutional, the Pakistan Petroleum Dealers Association (PPDA) has declared a statewide strike for July 5. The walkout is expected to result in the closure of more than 13,000 gas outlets. Although a monitoring cell has been established by the government to oversee the situation, a legislative procedure will be required to reverse the tax.
According to PPDA Chairman Abdul Sami Khan,They requested that we end the strike and made a commitment to address the problem, but we are unable to postpone the strike in exchange for their promises.He had meetings with a number of government representatives, such as the petroleum secretary, the chairman of the Federal Board of Revenue, the chief of the Oil and Gas Regulatory Authority, and the finance minister.
“Until the ‘unfair’ turnover tax is removed, there will be no further discussions with the government,” Mr. Khan declared. He mentioned that starting on Thursday, gas stations would run out of fuel. He referred to double taxation as unconstitutional and cruel.Mr. Khan declared that on July 5, more than 13,000 gas outlets would close at six in the morning. Until their demands are fulfilled and formally acknowledged, the strike may go on. He advised proprietors and operators of retail establishments to hold onto their inventory on July 4.
The Petroleum Ministry has established a monitoring cell in response. During the strike, this cell will manage gasoline supplies and communicate with relevant parties. delegates from the Oil and Gas Regulatory Authority, oil marketing companies,and the focus personnel for this cell have been designated by the petroleum division.
Additionally, the ministry gave orders to companies that market oil. Petroleum product inventories at locations owned or run by the corporation must be kept at an adequate level. This is to prevent inconvenience to the public and industry, as well as disruptions to the supply chain.
The turnover tax included in the most recent budget is being opposed by dealers. They contend that their ultimate income tax already includes an advance fixed withholding tax of Rs. 1.4 per liter, or roughly 12% of dealer commission. The definitional problem with “dealers and distributors” is the cause of the new 0.5% advance turnover tax. It is double taxation in this sense.
The chairman of the Federal Board of Revenue gave the dealers his word that the turnover tax would be eliminated. It is a time-consuming process, though. According to the petroleum secretary, the Finance Act 2024–25 was used to levy the tax. The president supported this act, which was approved by parliament. It needs to be reversed through legislative action.
