Finance minister confirms increasing PDL limit to Rs50 per litre

Claims electricity to be sold at variable cost to industry by next year
Jun 24, 2022

Finance Minister Miftah Ismail has confirmed that the government has increased the limit for the Petroleum Development Levy (PDL) from Rs30 to Rs50 per litre, but insisted that it was not going to jack up PDL immediately.

Speaking at a TV show Friday evening, the finance minister indicated that the PDL of Rs37.5 could be imposed on petroleum products after July 1.

He said that although the government had increased the PDL limit to Rs50, it was not going to impose such a high amount of levy, at least not with GST.

The finance minister said that Pakistan’s consumed around 2 billion litres of petrol and diesel and by imposing Rs37.50 per litre PDL, the government would successfully achieve its target of Rs750 billion PDL collection.

Asked did the levying of PDL not amount to depriving people of fuel price reduction in future, the minister said, “This is called prudent fiscal management.”

If the petrol prices do not fall, the government will make up for the revenue from duty, he added.

He insisted that the super tax is a one-time measure and was not likely to be imposed in every budget. It will also apply to the banking and sugar sectors, the minister said.

The tax has been levied on the sectors that have earned profits, he said.

The finance minister said that during the negotiations the IMF relented to the current government over some points and the government agreed to some of the IMF demands.

Gold shops taxed

Miftah said that the government will collect Rs45 billion in taxes from retail shops through fixed tax ranging between Rs3,000 and Rs10,000.

He said that only 22 out of 30,000 jewelry shops are registered with the tax authorities and the rest were not paying tax. The government has decided to bring the tier-one gold shops under the sales tax net, he said.

Miftah insisted that the government has reduced the tax on gold jewelry from 17% to 3%.

Commenting on a comparison between the PTI and the PML-N government, Miftah said that under the PTI tax-to-GDP ratio constantly dropped and Imran Khan presented four budgets with around Rs5 trillion deficit each time.

The Imran Khan government left the country on the verge of default, the finance minister said.

Miftah said in the outgoing fiscal year the current account deficit (CAD) was going to surpass $17 billion.

He said the PTI government got a break during the otherwise deadly Covid1-19 pandemic when global lenders deferred repayments of $4 to $5 billion loans and the IMF suspended its conditions.

LNG and oil were available at low prices but the then government failed to availe the benefit for the country, he said.

The finance minister said that he stood by his past statements about power tariffs and electricity would be sold to the industry at the variable cost by the next winter.

Asked whether Ishaq Dar was planning to return to Pakistan and assume charge of the finance ministry, Miftah said he too was hearing the rumors but Pakistan did not belong to only him and that Dar was free to return anytime.

miftah ismail

super tax

PDL

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