In ongoing negotiations with the International Monetary Fund (IMF), Pakistan has pledged to boost its annual petroleum levy collection to Rs 920 billion for the current fiscal year.
As reported by The Express Tribune, the government has assured the IMF of increasing the petroleum levy annual target from Rs869 billion to Rs920 billion, an additional Rs50 billion, aiming to offset the loss of revenue from other non-tax sources.
This commitment comes as the government faces difficulties in fully recuperating the Gas Infrastructure Development Cess (GIDC) from influential industries.
The government currently imposes an Rs60 per litre petroleum tax on both petrol and diesel, with the initial budgeted collection target under this head being Rs869 billion. However, this target has now been revised upward to nearly Rs920 billion.
In the first quarter, the government already collected Rs222 billion under the petroleum levy, marking a substantial 367 percent increase compared to the same period last year.
While committing to increase the petroleum levy collection, the government has simultaneously reduced the revenue collection target from the GIDC by Rs10 billion to Rs30 billion.
The GIDC, previously nullified by the apex court, had companies accumulating Rs416 billion by December 2018, which was not deposited in the national treasury.
In September 2019, PTI government issued a Presidential Ordinance to waive off half of the Rs416 billion. Following media criticism, the the government withdrew the ordinance and opted to settle the matter of the outstanding dues through court proceedings. The Supreme Court annulled the GIDC statute, dismissing the federal government’s review petition.
Since 2019, only Rs80 billion of the Rs416 billion has been recovered, with about Rs337 billion still pending. The target for recovery has been further reduced by Rs10 billion.
Despite an increase in the petroleum levy collection, the target for non-tax revenues has been slashed by Rs97 billion.
The Federal Board of Revenue (FBR) maintained an unchanged tax collection target of Rs9.415 trillion. However, within this target, the income tax collection target was increased by Rs346 billion to compensate for shortfalls in sales tax, customs duties, and federal excise duty targets.