[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]As part of efforts to earn Rs. 2.9 trillion in non-tax income in fiscal year (FY) 2023-24, the government may boost petroleum levy rates on gasoline products to an all-time high of Rs. 60 per litre.
While still under discussion, the increase aims to provide additional financial room for spending, since the government estimates a 30% increase in expenditure on pension payments and civil government operations over the current fiscal year, according to the Express Tribune.
The Ministry of Finance (MoF) has proposed raising the tax rate by Rs. 10 per litre to generate around Rs. 870 billion from this source in the coming fiscal year. Currently, the levy amount is Rs. 50 per litre.
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The MoF is requesting a rate increase since it is widely believed that petroleum prices will stay high in the 2019 fiscal year, with market factors predicting an average exchange rate of Rs. 308 per dollar.
For the current fiscal year, the government has set a revenue target of Rs. 855 billion from the petroleum levy. However, revenue for the first nine months of FY23 totaled only Rs. 362 billion.
Profits from the State Bank of Pakistan (SBP) are another significant non-tax revenue stream. This category’s income is now expected to reach Rs. 1.1 trillion, up from Rs. 920 billion earlier. Non-tax revenues are not transferred to provinces, and the federal government is increasingly reliant on them to fund its expenditures.
To fulfil the target of Rs. 2.9 trillion in non-tax income for the next fiscal year, the government may consider new sources such as a wealth tax and a windfall charge on banks.
Pension spending is estimated to reach Rs. 780 billion in FY24, a 28 percent increase from FY23. Meanwhile, the cost of running the civil administration is expected to be over Rs. 720 billion in the coming fiscal year.
Surprisingly, the fiscal deficit for FY24 is estimated to be around 7.4 percent of GDP, or nearly Rs. 7.8 trillion. The overall main budget, on the other hand, may indicate a slight positive balance. The whole fiscal deficit might be Rs. 7.2 trillion, or 6.8 percent of GDP.[/vc_column_text][/vc_column][/vc_row]
