30.7 C
New York

Record Petroleum Levy Commitment


- Advertisement -

In a bid to compensate for the shortfall in Gas Infrastructure Development Cess (GIDC) recovery, Pakistan has pledged to increase its petroleum levy collection to a record Rs 920 billion in the current fiscal year. During recent review talks with the International Monetary Fund (IMF), the government assured an additional Rs50 billion to the existing annual target of Rs869 billion. This move comes as the petroleum levy emerges as the largest single source of tax collection, with Rs60 per liter imposed on petrol and diesel.

The commitment underscores the government’s dedication to meeting fiscal targets and addressing challenges in revenue generation. The petroleum levy, a significant contributor to government coffers, has witnessed a remarkable 367% increase, reaching Rs 222 billion in the first quarter, compared to the same period last year.

While Finance Ministry spokesperson Qamar Abbasi denies any commitment to change the petroleum levy rates, the government acknowledges concerns over project delays and aims to navigate these challenges collaboratively. The commitment to increase the levy collection aligns with the government’s strategy to offset revenue losses from non-tax sources and ensure fiscal stability.

Despite exceeding targets, the government has not lowered fuel prices, maintaining historically high levels amid continuous double-digit inflation. This move, coupled with a surge in the Sensitive Price Index, raises concerns about the impact on lower-income groups.

In parallel, the revenue collection target from GIDC has been reduced by Rs10 billion to Rs30 billion. The GIDC, previously struck down by the apex court, faced challenges in recovering outstanding dues from industries, resulting in a reduced target. Since 2019, only Rs80 billion of the Rs416 billion dues have been recovered, highlighting the complexity of settling the matter through court proceedings.

The overall target for non-tax revenues has been slashed by Rs97 billion, impacting the target of Rs2.1 trillion. While the Federal Board of Revenue’s (FBR) tax collection target remains unchanged at Rs 9.415 trillion, adjustments within tax categories have been made. Income tax collection sees a revised target of Rs4.23 trillion, compensating for reductions in sales tax, customs duties, and federal excise duty targets.

As Pakistan navigates economic challenges, the commitment to enhancing petroleum levy collection signals a proactive approach to ensure fiscal resilience and meet international financial commitments.

- Advertisement -

Related articles

Recent articles