Petroleum levy

ISLAMABAD: Pakistan cannot come out of the clutches of the IMF until the masses support the unpopular decisions of the present government, said the state minister for finance & economic affairs Hina Rabbai Khar on Thursday.

She was talking to the media after the meeting of the steering committee on Iran-Pakistan (IP) gas pipeline project at the ministry of petroleum.

“We are not living in utopian world. If we will not levy certain taxes, it would limit the development and growth,” she said.

“There is no tax culture in the country and we are lowest in the world hovering around nine per cent of the GDP and with this low revenue collection,” said Khar asserting that the government has to finance this shortfall from anywhere.

Elaborating newly promulgated presidential order, the state minister on finance said that new levy is not Petroleum Development Levy (PDL) but it is only petroleum levy (PL) on the POL. The Supreme Court of Pakistan has only objected to the nomenclature of the PDL and the government changed it to comply with apex court order, she added.

The minister further said that the government levied carbon surcharge to overcome its unmanageable balance of payments, transparency in the oil sector and discourage oil import bill.

Giving the example of POL prices in the region and across the globe, she said that the POL products in India are taxed and they comprised above 50 per cent of the sale price while in the advance countries, the governments are collecting 60 to 80 per cent but in Pakistan the POL products only contribute 45 per cent of the taxes in the price.

Government also introduced two steps in the finance bill of i.e. imposition of taxes on services and real estate while the two other sectors with the consent of provinces would be included next year, said the minister.

About the petroleum levy, Khar said that it would be adjusted in the next National Finance Commission as the prime minister has already announced its re-constitution while the carbon surcharge can not be adjusted.

Later, Prime Minister on petroleum Dr Asim Hussain briefing the media on IP gas pipeline said that the issue would be put before the parliament and the fate of IP would be decided by the Parliamentarians.

To a question about late night promulgated presidential order, Dr Asim said that levying carbon surcharge was technically wrong. In compliance of order passed by the Supreme Court, “All the arms of the state are working in harmony.”

About giving relief to the masses in compliance with the orders of Supreme Court, advisor said that it was difficult for the government to bridge the budgetary deficit by not imposing new taxes particularly on POL products and it would ultimately lead to economic slow down. link....