ISLAMABAD: The International Monetary Fund (IMF) has raised serious objections over the budgetary framework for 2023-24 and asked the government to increase both tax and non-tax revenues efforts.
Senior officials from the Ministry of Finance have informed the Senate Standing Committee on Finance and Revenues about the IMF reservations, according to press reports.
They conceded before the committee that the IMF was not satisfied with the budgetary framework for 2023-24, so they would have to defend increasing the petroleum development levy up to Rs869 billion for the next fiscal year against revised estimates of Rs542 billion in the outgoing financial year.
But the senators strongly opposed the Ministry of Finance’s move to bypass the parliament and empower the government in the proposed amendment in the Petroleum Levy Ordinance 1961 to jack up the petroleum levy beyond Rs50 per litre.
The government has worked out a petroleum levy beyond Rs50 per litre and will increase it up to Rs60 per litre, keeping in view the consumption pattern in the country through the Finance Bill 2023-24.
The consumption of diesel has decreased by 45% so far in the outgoing financial year.
The Senate panel also rejected the imposition of 0.6% advance tax on cash withdrawals exceeding the Rs50,000 limit and proposed to jack up the tax rate to 1% and reduce the limit to Rs25,000 for non-filers.
It also proposed changes in the tax rates for Super Tax and recommended reducing the maximum rate from 10% to 8% for the maximum slab.
In another significant development, the Securities and Exchange Commission of Pakistan (SECP) expressed severe concerns over increased money laundering chances after enhancing foreign remittances’ monetary limit from five million rupees to $100,000.
SECP Commissioner Abdul Rehman Warraich informed the Senate committee that the FBR could not ask for the source of investment or income under Section 111 of the Income Tax Ordinance 2001.
Similarly, the FBR cannot probe tax evasion on the basis of the source of remittance under Section 111 of the Ordinance 2001.
Basically, Section 111 taxed unexplained income except foreign remittances coming into Pakistan.
Earlier, a female Joint Secretary of the Budget Wing Ministry of Finance made a startling disclosure during the Senate Standing Committee on Finance meeting that the amendment in the Finance Bill for 2023-24 proposed to grant powers to the government through the Fifth Schedule for making petroleum levy flexible and increase it to Rs60 per litre whenever required.
She further said the Ministry of Finance has worked out jacking up the petroleum levy to Rs60 per liter from the existing limit of Rs50 per litre to achieve the desired amount from the petroleum levy.
The Senate committee met under Senator Saleem Mandviwalla. The chairman inquired why the finance ministry did not want to come to parliament to increase the limit of petroleum levy, but the ministry high-ups could not satisfy the members.
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