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Saturday Jun 12 2021
Web Desk

Budget 2022: Major hike in petrol prices likely

Web Desk

  • Pakistan doesn't want to exit from the IMF programme, says Shaukat Tarin.
  • Says Saudi Arabia has agreed to provide oil on deferred payments, but it could not be ascertained how much oil Pakistan will get.
  • The minister says next tranche of IMF grant could be delayed.

ISLAMABAD: Finance Minister Shaukat Tarin Friday said the prices of petroleum products will be increased in the coming month as talks with the International Monetary Fund (IMF) continue over the stabilisation of revenue collection.

Talking on ‘Naya Pakistan’ programme, he said the petroleum levy would be increased up to Rs600 billion in the coming fiscal year so the levy will have to be jacked up in the range of Rs20 to Rs25 per litre, while currently Rs5 per litre levy was being charged.

When asked whether Pakistan will pull out of the IMF programme if the Fund rejects the proposals and sticks to its demands, the finance minister said Pakistan will not exit from the programme, adding that the Fund had asked Pakistan to present its budget so negotiations will continue.

He said Saudi Arabia had agreed to provide oil on deferred payments, but it could not be ascertained how much oil Pakistan will get.

While responding to a question about the negotiations, he said they had conveyed to the IMF that it should not be their problem on how the Federal Board of Revenue (FBR) meets the set revenue collection target of Rs5.829 trillion.

A deadlock persisted between the two sides over different issues, including fixation of petroleum levy, FBR’s tax collection target and assessment of elimination of tax exemption, an exact timeframe to hike the power and gas tariffs and autonomy to regulators such as SBP and Nepra with approval of Parliament.

The finance minister said remittances would increase from $32 to $33 billion in the next fiscal year. He said the current account deficit will be in the range of $2 billion to $3 billion in the next fiscal year.

Ambitious target

In the Finance Bill 2021-22, the government is eyeing Rs506 billion in additional revenue through taxation and enforcement measures during the next fiscal year.

The FBR will fetch a net additional collection of Rs264 billion through taxation measures and another Rs242 billion in the shape of enforcement measures.

In order to materialise the fixed tax target of Rs5.8 trillion, the FBR will generate Rs2.1 trillion through direct taxes and Rs3.6 trillion in the shape of indirect taxes.

It clearly indicates that the reliance on increased indirect taxation will continue for the next fiscal year.