The International Monetary Fund (IMF) rejected the exemption from Pakistan’s sales tax on electric vehicles (VE), insisting that tax rates should remain in conformity with standard policies, said Express News reported on Wednesday .
According to sources, the world lender has raised objections to tax concessions as part of the country’s electric vehicle policy, in particular the exemption from the local sale of components of electric vehicles.
The Ministry of Industries and Production had recommended tax relief to stimulate the adoption of the EV, but the IMF opposed this decision, arguing that the sales tax on raw materials for electric vehicles should not be canceled.
Pakistan and IMF are currently engaged in climate financing negotiations, with discussions now in their third round.
Conferences are also provided on the charging stations of electric vehicles and tariff adjustments, the authorities planned to inform the IMF on the country’s objective of establishing 3,000 accusation terminals by 2030.
It should be noted that a technical delegation of the International Monetary Fund (IMF) arrived in Islamabad on Monday to discuss climate funding and related political measures with Pakistani officials.
The objective of the IMF team is to engage in talks with the federal and provincial authorities to examine climate financing strategies, including green budget and monitoring mechanisms.
The discussions, which take place until February 28, aim to assess Pakistan’s progress on the adaptation and financing of the climate.
A key element of the agenda is the proposed introduction of a carbon tax in the federal budget for the year 2025-26.
The IMF will present recommendations on its implementation and its framework.
Negotiations also cover subsidies, electric vehicles and the expansion of green budgeting. Officials should provide briefs on Pakistan’s current climatic initiatives and future plans.
The visit to the IMF delegation is one of the broader efforts to align Pakistan’s financial policies with global climate commitments, ensuring sustainable economic reforms.
