Surplus on paper, burden on people

August 15, 2026

The government says it closed the financial year with a primary budget surplus of around Rs3.6 trillion. This is the third year in a row that the government has managed this feat. On paper, this looks like good news. It shows fiscal discipline and helps Pakistan meet its IMF targets. But a closer look tells a different story, one that ordinary citizens are living through every day.

The surplus was not built on stronger tax collection. The Federal Board of Revenue actually missed its target by nearly Rs1 trillion. Instead, the government leaned heavily on the petroleum levy. Collections from this single source jumped by 28 per cent and crossed Rs1.567 trillion. This levy is charged at Rs80 per litre on petrol and diesel. It hits every citizen directly, from the farmer running a tube well to the daily wage worker commuting to a factory.

This is the real problem. A government struggling to widen its tax net is instead squeezing more money out of fuel prices. Every rupee added to the petroleum levy pushes up transport costs. It raises the price of food, medicine and almost everything else that must be moved from one place to another. This is exactly why inflation continues to bite ordinary households, even as officials celebrate a fiscal surplus in press releases.

The government now plans to collect Rs1.7 trillion through this levy in the current year. That means more pressure on fuel prices is coming. A surplus achieved through petroleum taxes instead of genuine reform is not a lasting solution. It only shifts the burden onto people who are already struggling with high prices.

Pakistan does not need more levies. It needs real tax reform that brings undertaxed sectors into the net, so ordinary citizens are not made to carry the weight of fiscal discipline alone.