Pakistan sets lower revenue targets for oil, gas firms
Govt eyes collection of Rs359b against Rs486b in previous year
PHOTO: Reuters
ISLAMABAD:
Following the failure to achieve revenue target for the outgoing fiscal year, the government has come up with comparatively lower targets of revenue receipts from oil and gas companies in the next fiscal year.
The target of revenue collection from oil and gas companies had initially been fixed at Rs486.3 billion for the outgoing financial year, which was revised downwards by the Pakistan Tehreek-e-Insaf (PTI) government to Rs338 billion. This has led the government to set a target of Rs359 billion for the next financial year 2019-20.
The major hit to revenue collection came from the gas infrastructure development cess (GIDC) as its actual collection stood at just Rs25 billion against the target of Rs100 billion, following stay orders from courts.
The government had also announced an amnesty scheme for fertiliser, textile and CNG industries by waiving 50% of outstanding GIDC, but the scheme could not provide any benefit.
These industrial barons had to pay Rs450 billion, of which the government waived half the amount. For the next fiscal year, the government has set Rs30-billion target for GIDC collection.
Another hit to revenue collection came on account of petroleum levy on the sale of petroleum products. A high target of Rs300 billion was set for the collection of petroleum levy for the outgoing fiscal year in the wake of an increase in consumption of petroleum products.
However, the government collected Rs203.35 billion, according to revised estimates. It has now set a target of Rs216.025 billion for the next financial year.
According to the breakdown, targets for petroleum levy on oil and liquefied petroleum gas (LPG), gas development surcharge and GIDC have been set. However, it did not include the general sales tax on petroleum products.
For the outgoing year, the government had set a target of Rs10 billion for the discount retained on local crude prices, which was later revised upwards to Rs14.03 billion. For the next fiscal year, the government has set a target of Rs16 billion.
Moreover, the target for a royalty on crude oil was set at Rs16.82 billion for FY19, which was later revised upwards to Rs26.9 billion. The new target for a royalty on crude oil has been set at Rs24.6 billion.
For petroleum levy on LPG, the government has set a target of Rs4 billion against Rs3.76 billion for the outgoing financial year, according to revised estimates.
The government will also collect Rs51.5 billion in royalty on natural gas from gas consumers in the next financial year against Rs51.2 billion in the current financial year, according to revised budget estimates.
A target of Rs7 billion has been set on account of windfall levy on crude oil. The government had set a target of Rs5 billion for the outgoing financial year, whereas the actual collection went up to Rs6.97 billion.
Gas development surcharge - the difference between prescribed and sale prices of gas that goes to provinces - is expected to bring Rs10 billion next year. In the outgoing year, its target was Rs16 billion while receipts were recorded at Rs8 billion due to the revision in prescribed gas prices.
Published in The Express Tribune, June 12th, 2019.
Following the failure to achieve revenue target for the outgoing fiscal year, the government has come up with comparatively lower targets of revenue receipts from oil and gas companies in the next fiscal year.
The target of revenue collection from oil and gas companies had initially been fixed at Rs486.3 billion for the outgoing financial year, which was revised downwards by the Pakistan Tehreek-e-Insaf (PTI) government to Rs338 billion. This has led the government to set a target of Rs359 billion for the next financial year 2019-20.
The major hit to revenue collection came from the gas infrastructure development cess (GIDC) as its actual collection stood at just Rs25 billion against the target of Rs100 billion, following stay orders from courts.
The government had also announced an amnesty scheme for fertiliser, textile and CNG industries by waiving 50% of outstanding GIDC, but the scheme could not provide any benefit.
These industrial barons had to pay Rs450 billion, of which the government waived half the amount. For the next fiscal year, the government has set Rs30-billion target for GIDC collection.
Another hit to revenue collection came on account of petroleum levy on the sale of petroleum products. A high target of Rs300 billion was set for the collection of petroleum levy for the outgoing fiscal year in the wake of an increase in consumption of petroleum products.
However, the government collected Rs203.35 billion, according to revised estimates. It has now set a target of Rs216.025 billion for the next financial year.
According to the breakdown, targets for petroleum levy on oil and liquefied petroleum gas (LPG), gas development surcharge and GIDC have been set. However, it did not include the general sales tax on petroleum products.
For the outgoing year, the government had set a target of Rs10 billion for the discount retained on local crude prices, which was later revised upwards to Rs14.03 billion. For the next fiscal year, the government has set a target of Rs16 billion.
Moreover, the target for a royalty on crude oil was set at Rs16.82 billion for FY19, which was later revised upwards to Rs26.9 billion. The new target for a royalty on crude oil has been set at Rs24.6 billion.
For petroleum levy on LPG, the government has set a target of Rs4 billion against Rs3.76 billion for the outgoing financial year, according to revised estimates.
The government will also collect Rs51.5 billion in royalty on natural gas from gas consumers in the next financial year against Rs51.2 billion in the current financial year, according to revised budget estimates.
A target of Rs7 billion has been set on account of windfall levy on crude oil. The government had set a target of Rs5 billion for the outgoing financial year, whereas the actual collection went up to Rs6.97 billion.
Gas development surcharge - the difference between prescribed and sale prices of gas that goes to provinces - is expected to bring Rs10 billion next year. In the outgoing year, its target was Rs16 billion while receipts were recorded at Rs8 billion due to the revision in prescribed gas prices.
Published in The Express Tribune, June 12th, 2019.