Government Of Pakistan May raise petroleum levy above 100 PKR

The government of Pakistan is thinking of alternative plans to increase the taxes, as world practice is to increase taxes on petroleum products. The government of Pakistan is in a catch-22 phase as it does not want to increase taxes on normal household items. However, they are planning to increase some goods that will fall under luxury items. If they fall under luxury items, citizens will have to pay 25% GST for that item. However, the government of Pakistan is forming a plan not to increase taxes on daily needs and apply world best practices to increase taxes on petroleum products.

In India, petroleum products are taxed by more than 100%, and still India's economy is better than Pakistan's because they apply taxes on the right products and not on daily household needs. The government of Pakistan might increase the petroleum levy above 100 PKR to give them the cushion not to increase taxes on other items. For example, the government of Pakistan has not decreased the prices of petrol and diesel. The government of Pakistan maintained the prices, therefore, to ensure that the government collected more revenue, and decreasing fuel prices could have impacted the import bill, which the government wanted to avoid. 

It is the right move by the government that they do not allow unnecessary use of petroleum products, which tends to be a disaster for the government of Pakistan, and it also increases the import bill as well, which has to be paid from the forex exchange reserve, which Pakistan barely has. Therefore, the government of Pakistan is making the right plans to ensure that Pakistan does not face another current account deficit situation where, for the sake of increasing growth, it always leads to unstable current account deficits.