Pakistan’s finance minister says any reduction in the petroleum levy would require an alternative revenue source to secure IMF approval.
ISLAMABAD, Pakistan — WEB DESK: Pakistan’s Finance Minister has said the International Monetary Fund (IMF) is unlikely to approve any reduction in the country’s petroleum levy unless the government first presents a credible plan to offset the resulting loss in revenue.
Speaking on the issue of fuel taxation, the minister said the petroleum levy remains an important source of government revenue and is a key component of Pakistan’s commitments under its IMF-supported economic reform programme.
IMF Approval Depends on Revenue Replacement
According to the minister, reducing the petroleum levy without identifying an alternative source of revenue would make it difficult to obtain IMF approval.
He stressed that any proposal to lower the levy would need to be accompanied by fiscal measures that ensure government revenues remain on track and programme targets are met.
Balancing Public Relief and Fiscal Discipline
The government has faced growing calls to reduce fuel-related taxes to ease the burden on consumers amid fluctuations in global oil prices.
However, officials maintain that Pakistan must balance public relief measures with fiscal discipline to preserve macroeconomic stability and meet commitments agreed with the IMF.
Petroleum Levy Remains Key Revenue Source
The petroleum levy generates significant income for the federal government and plays an important role in financing public expenditure.
Economic analysts say any reduction in the levy could widen the fiscal deficit unless compensated through higher revenues elsewhere or spending adjustments.
The government has repeatedly stated that it remains committed to implementing reforms under the IMF programme while exploring options to provide targeted relief to consumers.
