Budget 2025-26: Increased Burden Warned by Senate Chairman
- Pakistan's upcoming budget will likely burden citizens further through an increased petroleum levy, according to Senator Saleem Mandviwalla, chairman of the senate standing committee on finance and revenue.
- Mandviwalla, a former finance minister, also criticized the Federal Board of Revenue (FBR), particularly it's Tajir Dost Scheme (TDS), designed to broaden the tax net by collecting taxes...
- Responding to questions about the FBR's reported failure to raise Rs5.6 million under the TDS, Mandviwalla asserted the FBR has not effectively expanded the tax base.
Senator Mandviwalla warns Pakistan’s 2025-26 budget will increase the financial burden on citizens through a higher petroleum levy. The former finance minister criticizes the FBR, citing its failure to effectively expand the tax base despite promises of reform. He advocates for modernizing the taxation system, using technology, and learning from examples like Turkey and India. The increased petroleum levy aims to address a meaningful revenue shortfall, with the public bearing the brunt of the rising costs. The piece reveals the government’s plans despite an earlier decision to prevent petroleum prices from falling. News Directory 3 provides timely updates and analysis. Discover what’s next for the public’s finances and the upcoming budget’s impact.
Pakistan Budget: Petroleum Levy Hike to Burden Public, Senator Warns
Updated May 28, 2025
Pakistan’s upcoming budget will likely burden citizens further through an increased petroleum levy, according to Senator Saleem Mandviwalla, chairman of the senate standing committee on finance and revenue.
Mandviwalla, a former finance minister, also criticized the Federal Board of Revenue (FBR), particularly it’s Tajir Dost Scheme (TDS), designed to broaden the tax net by collecting taxes from shopkeepers based on their stores’ fair market value and sales.
Responding to questions about the FBR’s reported failure to raise Rs5.6 million under the TDS, Mandviwalla asserted the FBR has not effectively expanded the tax base.
He advocated for modernizing the FBR, stating the need for officers skilled in using technology to enhance the taxation system, citing Turkey and India as examples. He lamented the lack of progress despite repeated promises of FBR reform.
Mandviwalla anticipates the upcoming budget will be a “standard-type budget” that strains public finances. He expressed little hope for any relief.
The senator said the petroleum levy increase aims to offset a Rs700 billion revenue shortfall.He explained that the public will bear the cost of addressing the budget deficit through this levy.
The government had previously targeted Rs1.28 trillion in petroleum levy collections for the fiscal year 2024-25, a 47.4% increase from the prior year.
Last June, officials decided against allowing petroleum prices to fall below Rs80, fearing increased demand, higher carbon emissions, and greater foreign exchange costs.
Furthermore, the government committed to the International Monetary fund (IMF) to implement a Rs5 per liter carbon levy starting July 1, as part of a $1.3 billion Resilience and Sustainability Facility.
What’s next
The government is expected to present its budget soon, with the petroleum levy increase likely to be a key component. The public will be watching closely to see how the government balances its financial needs with the impact on citizens’ wallets.