The Federal Board of Revenue (FBR) has reduced sales tax to 16.40 per cent ad valorem on supply of petrol. The FBR issued SRO 860(I)/2021 to reduce the sales tax on petrol. Through the SRO, the sales tax rate on petrol has been reduced to 16.40 percent ad valorem from 17 percent. The sales tax rates on kerosene oil and light diesel are 6.7 percent and 0.20 percent, respectively. The FBR kept the sales tax rate at 17 percent unchanged for high speed diesel oil. The rates of sales tax on petroleum products have been reduced so the government absorbs the high prices in the international markets and passes on the lesser effect to the consumers. Earlier on June 10, the government announced a cut in sales tax rates on kerosene oil and light diesel oil in order to absorb the price hike on petroleum products. In this regard, the Federal Board of Revenue (FBR) issued SRO 726(I)/2021 to comply with the decision of the government to keep the POL prices intact by absorbing a hike in prices through downward adjustment in sales tax rates. The sales tax rate on kerosene oil was reduced to 10.07 percent from the previous rate of 15.44 percent. Similarly, the sales tax rate on light diesel oil was reduced to 3.67 percent from 7.56 percent. Meanwhile, the sales tax rates on petrol and high speed oil had been kept unchanged at 17 percent.