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Thursday, May 23, 2024

Govt proposes 455% hike in PL

Government proposes reliance on petroleum levy to be raised by 455 percent to Rs750 billion in the federal budget 2022-23.

In the federal budget 2022-23, reliance on petroleum levy (PL) has been proposed to be raised by 455 per cent to Rs750 billion from Rs135 billion to fetch an additional revenue of Rs615 billion, Bloomberg reported.

It said the actual PL budgeted for the current year was Rs610 billion. But due to the excessive increase in its international oil price and the decision taken on February 28, 2022, to withdraw PL on fuel till the end of June 2022, the government missed by Rs475 billion.

Under miscellaneous receipts, the PL collection target was revised downward by 77 per cent to Rs135 billion for the current financial year 2021-22.

Read more: Finance Minister Miftah Ismail presents budget for the fiscal year 2022-23

On the other hand, Finance Minister Miftah Ismail once again indicated a hike in petroleum prices and said the government would end subsidies on fuel soon.

Speaking on Geo News‘s “Aaj Shahzeb Khanzada Kay Saath,” Ismail said, “We don’t want to take the country on the path to bankruptcy like Srilanka. Therefore, tough decisions are needed to be taken if you want to move the country towards prosperity.”

“We are still selling petrol at a loss and due to the huge deficit, the country is seeking financial packages and help every day. Therefore, to overcome the challenge we will have to take measures even if it means imposing taxes.”

The finance minister said that the previous government had allocated Rs30 in terms of levy and 17 per cent sales tax for FY22, adding that the government has the option of both a levy and a sales tax and “will see which to impose.”

“We don’t have any option left except for dealing with the IMF as the country has to pay a huge sum in terms of debt next year. If the government leaves the IMF programme then Pakistan will be a helpless country and [will likely] default.”

“However, we will not let this happen, we will negotiate with the IMF soon,” he vowed.

“For now, I think the monetary policy is moving towards contraction as an effort to increase the interest rate by State Bank of Pakistan (SBP) and it will help in controlling inflation,” he added.

In the budget for FY 23, the government projected a target of 11.5 per cent inflation. Ismail said the government would increase petrol prices, which will undoubtedly increase the rate of inflation in the country too.

“For now, I think the monetary policy is moving towards contraction as an effort to increase the interest rate by State Bank of Pakistan (SBP) and it will help in controlling inflation,” he added.