The Federal Board of Revenue (FBR) has notified PSO (Pakistan State Oil) that the company’s bank accounts have been restored with immediate effect. The board had frozen the bank accounts of PSO for failing to meet its tax obligations, but adjusted its decision in light of the grave challenges faced by the PSO as its receivables hover over Rs 170 billion. As the largest energy company in the country, PSO has always been prompt in making payments to the FBR and is a heavy contributor to the exchequer. However given the company’s unusually high receivables and the ever increasing circular debt, it has been prevented from meeting tax obligations.
The Ministry of Petroleum also supported the company in its talks with FBR. The tax authorities were apprised that their decision to freeze the accounts of PSO would lead to the mistrust of the international suppliers in doing business with Pakistan and its national companies. FBR was made aware of the gravity of the situation. While its receivables continue to mount, PSO has a responsibility to make payments to its international suppliers in order to ensure uninterrupted fuel supply to the nation. Currently the local refineries are not giving products to PSO. Therefore the company’s reliance on imports has increased. The company has urged the power sector to make immediate payments so that the company is in a better position to fulfill its international commitments and meet its tax obligations.
