PPDA initiates nationwide strike against new tax imposition

The Pakistan Petroleum Dealers Association (PPDA) has initiated a nationwide strike scheduled to begin on July 5 in response to the introduction of a 0.5% advance tax on turnover in the recent federal budget for 2024-25. This move has sparked discontent among petrol pump owners, who argue that the tax will further strain their already struggling businesses, which are grappling with high taxes and inflation.

PPDA Chairman Abdul Sami Khan has voiced concerns regarding the potential impact of the tax on dealers' profitability. He has warned that the strike may extend beyond a single day and has advised dealers to ensure fuel availability at petrol pumps until July 4. Khan has urged citizens to refuel their vehicles ahead of the strike to avoid any inconvenience.

Khan emphasized that despite engaging in discussions with relevant authorities, no resolution has been reached. The decision to strike stems from the perceived double taxation, which the PPDA deems unconstitutional. With slim profit margins and escalating inflation, dealers find the additional tax unsustainable for their operations. The strike, involving 13,000 dealers, is set to close petrol pumps on July 5, with Khan cautioning that permanent closures may follow if the tax is not retracted.

The federal budget for Pakistan's fiscal year 2024-25, amounting to $67.76 billion and effective from July 1, has set a lofty tax revenue target of Rs 13 trillion ($46.66 billion) and projected an annual inflation rate of up to 13.5% for June. This budget has faced criticism for its ambitious revenue collection goal, significantly higher than the previous fiscal year. Khan has urged the government to abolish the tax promptly to avert severe repercussions on petrol pump businesses, offering to engage in dialogues to seek viable solutions.

It is imperative to recognize that the PPDA stands firm in its position, signaling that the strike will proceed as planned unless the government addresses their grievances. Failure to resolve the issue promptly could lead to a nationwide disruption in fuel supply, underscoring the urgency of finding a resolution.