ISLAMABAD: The Finance Ministry has said the Petroleum Development Levy (PDL) is not the central element of Pakistan’s programme with the International Monetary Fund, although petroleum pricing and levy-related measures remain part of the agreed framework.
In a statement issued Tuesday, the Finance Division said several media claims concerning Pakistan’s engagement with the IMF did not accurately represent the institutional process behind the economic stabilisation programme.
The ministry said the Extended Fund Facility and Resilience and Sustainability Facility involve reforms across multiple institutions, including the Finance Division, Planning Commission, Ministry of Energy, Federal Board of Revenue, State Bank of Pakistan and provincial governments.
PDL One of Several Revenue Measures
According to the Finance Division, relevant ministries and institutions lead technical discussions and agree on benchmarks covering their respective responsibilities.
Furthermore, the government’s fiscal strategy includes FBR revenue mobilisation, expansion of the tax base, provincial taxation and expenditure rationalisation. The PDL represents only one of several revenue instruments.
However, the ministry acknowledged that petroleum pricing forms part of the IMF framework. Programme documents provide for regular adjustments to align domestic fuel prices with international prices, while the RSF includes a supplementary carbon levy through the PDL framework.
Ministry Links Fiscal Stability With Sustainable Growth
The Finance Division said inflation and economic growth depend on several factors rather than the PDL alone, including commodity prices, exchange-rate movements, monetary conditions, fiscal imbalances, external financing constraints and global shocks.
Meanwhile, the ministry said fiscal stabilisation and economic growth were interconnected objectives, with sustainable finances and stronger reserves supporting private investment.
The IMF programme also includes social-protection measures, including spending floors for the Benazir Income Support Programme and inflation adjustments to cash transfers.
Additionally, the ministry said provincial governments remain responsible for agricultural income taxation, while the Finance Division coordinates the overall IMF programme.
