Islamabad: The International Monetary Fund (IMF) has declined Pakistan's request for a sales tax exemption on electric vehicles (EVs), emphasizing that tax rates should adhere to established policies, according to The Express Tribune.
The IMF has expressed concerns regarding tax incentives within Pakistan's EV policy, particularly the exemption on the domestic sale of EV components, as reported by sources to The Express Tribune.
Pakistan's Ministry of Industries and Production had suggested this tax relief to encourage the adoption of EVs. However, the IMF opposed this recommendation, insisting that the sales tax on raw materials for EVs should remain intact, as indicated in the report.
Currently, negotiations between Pakistan and the IMF are ongoing regarding climate financing, with discussions now in their third round. Additional talks are planned concerning electric vehicle charging stations and tariff adjustments, with the Pakistani government preparing to inform the IMF about its goal of establishing 3,000 charging stations by 2030.
A technical team from the IMF arrived in Islamabad on Monday to engage with Pakistani officials on climate financing and associated policy measures. The objective of the IMF team is to discuss strategies for climate financing, including tracking mechanisms and green budgeting.
The discussions, which are set to continue until February 28, aim to evaluate Pakistan's progress in climate adaptation and financing. A significant topic on the agenda is the proposed implementation of a carbon tax in the federal budget for the fiscal year 2025-2026, as reported by The Express Tribune.
