Govt considers Rs72bn tax on OMCs’ extraordinary profits during regional conflict

ISLAMABAD: The government is considering imposing a windfall gain tax on oil marketing companies (OMCs) in the upcoming FY2026-27 budget to recover an estimated Rs72 billion earned as extraordinary profits during the recent Middle East conflict, sources said.

According to sources in the Ministry of Finance, OMCs reportedly made profits of around Rs130 billion on petroleum products during the period of heightened regional tensions.

Sources said the proposed recovery could be made under Section 99D of the Income Tax Ordinance, 2001, which empowers the federal government to impose an additional windfall tax of up to 50% on unexpected or extraordinary profits earned by companies in specified sectors.

Officials said the recovered amount could be used for petroleum subsidies, relief in electricity tariffs, and reducing the fiscal deficit.

Sources added that the government is examining legal and financial mechanisms to recover the extraordinary profits from OMCs through the proposed windfall gain tax in the next fiscal year.

Meanwhile, Prime Minister Shehbaz Sharif has constituted a committee headed by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb to finalise preparations for the upcoming federal budget.

According to the Ministry of Finance, the committee will formulate recommendations regarding ministries’ performance, development expenditures, and reforms in the energy sector.

The committee will also review the allocation and utilisation of funds generated through the Climate Support Levy.

Sources said that in line with IMF conditions, the Climate Support Levy is likely to be doubled from July 1.

The committee will conduct a comprehensive review of economic affairs before submitting its final recommendations to Prime Minister Shehbaz Sharif.

Sources further said that the upcoming budget may also include enhanced salary structures and incentives for foreign-qualified teaching staff, while performance reports have been sought from all ministries under the government’s rightsizing initiative.