In a bid to alleviate financial burdens, the Sui Northern Gas Pipeline Company Limited (SNGPL) has recommended amendments to tax laws, aiming to revise sales tax, income tax, and minimum turnover tax, sources within the Petroleum Division informed Business Recorder.
The proposed amendments address various tax issues previously highlighted by SNGPL, which were not addressed in the Finance Act 2023. The company stressed the urgency of providing relief in the upcoming Finance Bill for FY 2024-25, citing adverse effects on liquidity and profitability.
Sales tax issues concerning RLNG (Re-gasified Liquefied Natural Gas) transactions have been a key concern. SNGPL underscored challenges faced due to tax demands and proposed amendments to clarify that RLNG swapping between gas transmission and distribution companies should not be treated as a taxable supply.
Additionally, SNGPL highlighted the accumulation of input tax on RLNG purchases and proposed a reduction in sales tax rates to mitigate financial strains. The company also urged for amendments to address issues related to the payment of gas purchase invoices within the stipulated time frame, as well as the reduction of minimum tax rates.
Moreover, compliance issues with Section 34(5) of the Income Tax Ordinance 2001 were discussed, emphasizing the need for relief to mitigate increasing tax liabilities.
SNGPL urged the Petroleum Division to expedite the finalization of draft summaries for submission to the ECC (Economic Coordination Committee) of the Cabinet, seeking permanent resolutions to these tax issues.
The proposed amendments aim to provide much-needed relief to SNGPL and other gas companies, ensuring their financial sustainability amidst ongoing challenges in the energy sector.
Story by Mushtaq Ghumman
