11/07/2011 (Pakistan Observer) - Islamabad—The Directorate General of Intelligence and Investigation, Inland Revenue Federal Board of Revenue has started sector analysis of edible oil industry, taking into account import volume of Rs 197 billion raw materials consumed during first 11 months of 2010-11 and registration of around 10,000 to 15,000 wholesalers and distributors with the sales tax department.

Sources told that the rationalisation of taxes pertaining to the edible oil industry would be instrumental in generating additional Rs 5-10 billion. The agency would examine the whole edible oil industry and recommend changes in the tax system to generate additional revenue with documentation of the sector.

The sector analysis would focus on around 105 units, particularly containing commercial importers and importers-cum-manufacturers. The huge import volumes of raw materials particularly palm oil by the edible oil industry has prompted the DG Intelligence IR to check the profitability of the sector with special focus on 10,000 to 15,000 unregistered wholesalers, distributors along with others having stake in the sector. During July-May 2010-11, the imports value plus taxes on raw materials of this sector amounts to Rs 197 billion. The estimated imports could be around Rs 200-215 billion during 2010-11. If the local component be added like locally produced oil, it has been estimated that the amount may cross Rs 300 billion. The raw materials are consumed by the local industry, which is later sold in the domestic market. The sector study would focus on all stakeholders in the edible oil industry including importers, manufactures, oil extracting units, wholesalers, distributors, transporters and commission agents. Sources said that the basic purpose of the analysis is to check the profitability trends of the sector and reasons for massive non-registration of wholesalers, distributors and retailers of the industry. The agency would conduct an in-depth analysis of the sector, which would help in immediate registration of around 10,000 to 15,000 wholesalers/ distributors by the field formations.

The DG Intelligence IR was surprised that audit of only one importer-cum-manufacturer of ghee/cooking oil unit in Khyber Pakhtunkhwa made sales of around Rs 4 billion to 114 wholesalers and distributors and none of them were registered with the sales tax department.—Agencies