Petroleum levy enhanced to reduce shortfall

F.P. Report

KARACHI: President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and Former Provincial Minister, MianZahidHussain on Wednesday said that record hike in petroleum levy will help the government reduce revenue shortfall.

He said that the government has not reduced petroleum prices as per the expectations which will help it raise few hundred billion rupees.

MianZahidHussain said that the petroleum levy will not be enough to cover entire shortfall therefore sales tax can be increased by one percent on various items.

Talking to the business community, the veteran business leader said that Russia, Saudi Arabia and other countries are trying to control the fall in oil prices, if it rebounds, the government will have to hike sales tax by two to three percent while a steep fall in oil prices will provide relief.

The Former Minister noted that Prime Minister has refused the IMF’s desire to introduce a mini-budget, revise energy prices and increase taxes but the revenue agreed with the lender target must be achieved.

A revenue target of Rs5550 billion was agreed with the IMF which was revised to Rs5238 billion which if scaled down again will do away with the need to increase the sales tax.

He said that it is very difficult for the FBR to collect more than Rs4461 billion which will be short of Rs777 billion which was talked by imposing highest every petroleum levy in the history of the country.

He noted that enhancing sales tax will politically difficult, it will trigger inflation, hit businesses and agitate masses.

He said that social safety programmes for the poor are good but the masses will only get desired relief when the growth rate is triggered, exports are promoted and import curbs are softened, he said.