The Federal Board of Revenue (FBR) reported a revenue loss of Rs 1.25 trillion in the fiscal year 2022-23 due to sales tax exemptions granted to petroleum products, according to the Tax Expenditure Report 2024.
The report highlighted that petrol, high-speed diesel, kerosene oil, and light diesel collectively accounted for 43.99% of the total sales tax expenditure, showing a growth of 98.66% compared to the previous period.
The report further said that the increase in tax expenditure for these products was calculated over 12 months for 2022-23, compared to five months in 2021-22, following their zero-rating from February 1, 2022, as per SRO 321(I)/2022.Â
Consequently, the sales tax expenditure on these four petroleum products was Rs 633 billion for the five months in 2021-22 and Rs 1.257 trillion for the full year in 2022-23.
When comparing the sales tax expenditure on a twelve-month basis, the report indicated a decline of 17.23%, calculated by extrapolating the five-month average sales tax expenditure of 2021-22 over twelve months.
