The International Monetary Fund (IMF) has rejected the exemption of sales taxes proposed by Pakistan in electric vehicles (EV), insisting that tax rates must remain in line with standard policies, Express News reported Wednesday.
According to the sources, the global lender raised objections to fiscal concessions under the EVs of the country, particularly the exemption of the local sale of components of electric vehicles.
The Ministry of Industries and Production had recommended tax relief to promote the adoption of EV, but the IMF opposed the move, arguing that the sales tax on raw materials for EVs should not be renounced.
Pakistan and the IMF are currently dedicated to climate financing negotiations, with discussions now in their third round.
The conversations are also scheduled on the loading stations of electric vehicles and rates settings, with the authorities prepared to inform the IMF about the country’s goal of establishing 3,000 load stations by 2030.
It should be noted that a technical delegation of the International Monetary Fund (IMF) arrived in Islamabad on Monday to discuss climate financing and policy measures related to Pakistani officials.
The objective of the IMF team is to participate in conversations with federal and provincial authorities to review climate financing strategies, including ecological budget and monitoring mechanisms.
The discussions, which will run until February 28, aim to evaluate Pakistan’s progress in climate adaptation and financing.
A key element of the agenda is the proposed introduction of a carbon tax in the federal budget for fiscal year 2025-26.
The IMF will present recommendations on its implementation and frame.
Negotiations also cover subsidies, electric vehicles and the expansion of the green budget. Officials are expected to provide informative sessions on the current climatic initiatives of Pakistan and future plans.
The visit of the IMF delegation is part of broader efforts to align Pakistan’s financial policies with global climatic commitments, ensuring sustainable economic reforms.
