ISLAMABAD: Reliance on petroleum levy (PL) has been proposed to be raised by 73 percent in budget 2020-21 - from Rs 260 billion in the revised estimates of 2019-20 to Rs 450 billion next year to fetch additional revenue of Rs190 billion.
The projected target for next year is close to IMF's projection of Rs 489 billion PL collection in financial year 2020-21 in its Rapid Financing Instrument documents uploaded on its website.
The government budgeted Rs216.025 billion through PL in financial year 2019-20 but revised estimates indicate total collections of Rs260 billion - 20 percent higher than budgeted.
The additional revenue of Rs190 billion will help the center because this is not part of the Federal Divisible Pool (FDP) that has to be shared with the provinces as per the National Finance Commission (NFC) formula.
The PL will be kept at Rs30 per litre on all petroleum products, the maximum limit allowed under the Finance Bill 2018, for the entire financial year 2020-21. General Sales Tax, part of the FDP, on petroleum products will be kept at 17 percent.
For petroleum levy on LPG, the government has budgeted Rs 5.5 billion for financial year 2020-21 against Rs3.6 billion revised target of current financial year.
The budget for 2020-21 envisages Rs17 billion under discount retained on local crude prices. For the current financial year, the target was Rs16 billion.
The budgeted amount for royalty on crude oil is Rs 23 billion for next financial year against the revised estimates of Rs 25 billion for the outgoing year with revised estimates of Rs 24.6 billion.
The budget envisages Rs8 billion on account of windfall levy on crude oil against Rs7 billion for the current financial year 2019-20.
Taxes on oil and gas companies are budgeted to generate Rs 582 billion in 2020-21 against Rs 359 billion budgeted for 2019-20 which was revised upward to Rs386 billion.
The government has budgeted Rs 15 billion under gas infrastructure development cess (GIDC) for 2020-21 against the budgeted target of Rs 30 billion in 2019-20 revised down to 11 billion due to pending case in Supreme Court of Pakistan. The government had announced an amnesty scheme for fertiliser, textile and CNG industries by waiving 50 percent of Rs450 billion outstanding GIDC.
The government has budgeted Rs53.8 billion in royalty on natural gas from gas consumers in the next financial year against a revised target of Rs54 billion in the current financial year 2019-20.
Gas development surcharge - the difference between prescribed and sale price of gas that goes to provinces - is expected to bring Rs10 billion next year, the same amount as was budgeted in the current year.
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