ISLAMABAD: The International Monetary Fund (IMF) delegation held discussions with Pakistani officials on climate financing on Wednesday. The delegation, which arrived in Pakistan on Monday, raised concerns over the proposed sales tax relief on electric vehicles (EVs) under the country’s electric vehicle policy, sources revealed.
The IMF team rejected the proposed tax exemptions for EVs and local EV parts, urging the government to implement the regular tax rate instead. The delegation also advised against offering any concessions on the raw materials used in manufacturing electric vehicles, including locally supplied automobile spare parts. According to sources, IMF officials emphasized that no further tax relief should be granted to EVs in the future.
The Ministry of Industries and Production had proposed sales tax relief for domestic EV manufacturing as part of its push for greener technologies.
The third round of climate financing talks will take place today, with discussions focusing on EV charging stations and the OGRA tariff adjustment mechanism. Pakistani officials are expected to provide updates on the site selection for 40 EV charging stations and a goal of establishing 3,000 charging stations by 2030.
Additionally, discussions will include gas subsidy reforms and green budgeting strategies, including measures to track and report climate spending. The government is also considering introducing a carbon levy for the 2025-26 fiscal year. These talks, which are set to conclude on February 28, will center on climate change initiatives, with federal and provincial representatives briefing the IMF on their climate action plans.
