The government is thinking of raising the petroleum levy rates on petroleum products to a record Rs60 per liter, a move that might further fuel inflation.
The government expects this hike to contribute to its goal of collecting almost Rs2.9 trillion in non-tax income during the next fiscal year.
The administration anticipates a 30% rise in expenditures for pension payments and the operation of the civil government compared to the initial budget for this year, therefore the plan attempts to generate more budgetary room for spending.
For the fiscal year 2023–2024, the Ministry of Finance has suggested increasing the tax rate by an extra Rs10 per liter in order to raise about Rs870 billion from this source. The price per liter is now Rs50.
It has been proposed to raise the rates despite predictions that the price of crude oil would grow to $100 per barrel by the end of the year as a result of Saudi Arabia’s 100,000 barrels per day output reduction.
The government planned to raise Rs855 billion from the fuel charge during the current fiscal year. However, the total amount collected in the first nine months of current fiscal year was just Rs362 billion.
The government sought to bring in Rs1.9 trillion in non-tax revenue for the current fiscal year.
Exporters are currently not subject to FBR audits and are taxed under the Final Tax Regime. The RRMC suggests putting exporters under the Minimum Tax Regime in order to bring them under the regular tax system.
According to sources, the budget deficit for the fiscal year 2023–24, or the difference between spending and income, is predicted to be around 7.4% of GDP, or roughly Rs7.8 trillion.