Infostani Sources- Pakistan has committed to the International Monetary Fund (IMF) that it will boost petroleum levy collections by an additional Rs 920 billion in the current fiscal year. Finance Ministry sources revealed to the Express Tribune that, in the recently concluded review talks, the government assured the IMF of a hike in the annual petroleum levy target from Rs 869 billion to Rs 919 billion. They mentioned that the government is offsetting losses from other non-tax revenue sources through increased levy collections. Currently, the government imposes a petroleum tax of Rs 60 per liter on both petrol and diesel.
The government initially budgeted Rs 869 billion for this category but has now committed to increasing it to Rs 920 billion. Petroleum levy stands as the authorities’ primary source of tax collection, having collected 222 billion rupees in the first quarter. This marks a 367% increase compared to the same quarter last year, as per Ministry of Finance sources. Qamar Abbasi, the Ministry of Finance spokesperson, clarified that the government has made no promises on the petroleum levy and plans to further increase the levy rate on the IMF, keeping it fixed at Rs 60 per litre.
Petroleum Levy and GIDC Arrears: Challenges in Non-Tax Revenue Targets
The spokesman stated that lower-than-expected consumption of petroleum products resulted in annual receipts surpassing the budget by Rs 869 billion. Sources also mentioned a reduction in the cess (GIDC) from Rs 30 billion to Rs 20 billion. But companies had already collected Rs 16.4 billion by December 2018. In September 2019, the former Chairman of PTI issued a presidential ordinance to waive half of the Rs 416 billion. Facing media criticism. The PTI government withdrew the controversial ordinance and opted to address the Rs 416.3 billion arrears through the courts. Sources indicate that the government has received only Rs 80 billion out of the Rs 164 billion since 2019.
The remaining arrears amount to about 337 billion rupees. An earlier estimate of recovering 40 billion rupees, is now reduced by an additional 10 billion rupees. In 2019, fertilizer companies owed approximately 138 billion rupees, and the textile sector had total liabilities of 42.5 billion rupees. Captive power plants had liabilities of Rs 1.49 billion in 2019, while the CNG sector owed Rs 80 billion. A spokesperson from the Finance Ministry mentioned that various court cases have affected the recovery of GIDC arrears. Sources indicate that despite an increase in petroleum levy collection, the target for non-tax revenue has been reduced by 97 billion rupees from the earlier estimate of 2.1 trillion rupees.
Financial Highlights: Rupee Depreciation, Stock Market Fluctuations, and Gold Price Movements
The rupee experienced its third consecutive session of depreciation against the dollar on Monday, dropping below Rs 288. By the end of the business day, the inter-bank market saw the dollar’s value closing at Rs 285.96 paise, marking a decrease of 53 paisa. Similarly, the open currency market witnessed a decline of 75 paise, bringing the dollar’s value to Rs 287.50 paise. Despite setting new bullish records in the stock exchange last week, intermittent profit-taking persisted on Monday amid volatility. The depreciation occurred because the IMF Board approved a tranche of USD 70 million in the first 10 days of December, and there are expectations of additional inflows.
The share prices rose by 54% due to limited bullishness, resulting in a total increase in the value of shares by 13 billion, 88 crore, 78 lakh, and 44 thousand rupees during the trading period. There was a peak of 246 points and a subsequent decline of 325 points after 100. However, by the close of business, the KSE index showed a gain of 14.81 points, closing at 57077.96 points.
On Monday, the business volume decreased by 20.33% compared to last Friday, with a total of 7,182,085,234 shares traded. The business activities were limited to shares of 377 companies. Additionally, in the international bullion market, the price of gold per ounce dropped by 2 dollars to reach 1999 dollars. However, in local bullion markets, the price of 24-carat gold per tola stayed the same at 100,215 rupees, and the price of gold per ten grams also remained stable at 14,844 rupees without any changes.
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