IMF Pushes Pakistan to Collect 1.73 Trillion Rupees in Petroleum Levy Next Year

The International Monetary Fund has delivered a stark message to Pakistan’s economic managers: raise an unprecedented 1.73 trillion rupees through petroleum levy in the next fiscal year. That figure exceeds the existing budget target by 259 billion rupees and will translate into higher petrol and diesel prices for consumers and businesses alike. The Fund’s latest report calls for an extra 860 billion rupees in overall revenue, split evenly between federal and provincial efforts. The federal share is to come from new tax legislation and aggressive enforcement drives, while provinces must increase sales tax on services and begin collecting meaningful agricultural income tax. The federal budget itself is slated to grow to more than 17.1 trillion rupees, nine percent above the revised current-year size. Defence allocations are forecast at 2.665 trillion rupees, up by over 100 billion rupees. To meet these ambitious numbers, Islamabad has agreed to introduce an additional 215 billion rupees in taxation and to tighten audits, production monitoring, and compliance mechanisms. Because the Federal Board of Revenue has fallen short of revenue goals for two consecutive years, the IMF has converted previous indicative targets into a binding quantitative performance criterion. Any shortfall will now need explicit approval from the Fund’s executive board, raising the political stakes for the government. With inflation already biting ordinary households, the new levy and tax measures are likely to deepen economic hardship across the country.