ISLAMABAD: The Federal government has increased Petroleum Development Levy (PDL) on petroleum products to address reservations of the International Monetary Fund (IMF).
Sources said that the Pakistan and IMF team are trying their best to resolve a number of pending matters including expected shortfall in tax revenue to complete the 9th review of the Extended Fund Facility (EFF) programme.
The IMF team is asking Pakistan for additional revenue measures as the fund officials are expecting a Rs 400 billion shortfall in FBR revenue during this year.
It is pertinent to note that the government had budgeted a 26 percent growth in tax revenue in the ongoing year whereas 16 percent growth was recorded in the first five months collection of FBR.
Sources said that the Ministry of finance has increased Rs5 per liter PDL on High Speed Diesel(HSD), Rs6.09 Kerosene (SKO) and Rs0.90 Light Diesel Oil to meet the IMF condition of collecting Rs850 billion PDL during this fiscal year.
With this increase, the government is collecting Rs30 per liter PDL on HSD, Rs13.10 Kerosene (SKO) and Rs16.29 on Light Diesel Oil.
The government has already imposed a maximum Rs50 per litre PDL on Petrol and as per the IMF condition, government will increase PDL on other petroleum products till April next year to Rs50 per litre.
Sources said that the IMF has also estimated a Rs 250 billion shortfall on account of petroleum levy due to a 15 percent decline in consumption of petroleum products in the country.
Additionally, contraction in imports would also contribute to a shortfall in FBR revenue collection.
It is pertinent to note that the government has not been collecting sales tax on petroleum products since February this year.
Sources also said that the government will extend the Tax Laws (Second Amendment) Ordinance, 2022 for another four months which was introduced on August 23, 2022 by imposition of Rs 38 billion taxes.
It is pertinent to note that the State minister for finance and Revenue Ayesha Ghous Pasha had briefed the National Assembly Finance committee on Friday that IMF has reservations over a number of matters including tax collection.
The government had deferred the decisions on the pressure of the small traders community to collect Rs3000 per shop, similarly the property owners also do not want to give Capital Gain Tax adding that she said that such sort of tax culture is not sustainable for Pakistan.
She also shared with the committee that the IMF is asking to withdraw not only fuel energy subsidies but to end the circular debt of gas and electricity which has surged to Rs4 trillion.
The incumbent government during the last one week had four important meetings to curtail mounting circular debt to soothe the IMF.
Sources said that the government may use profits of companies as well as organizations to address the circular debt.
