Islamabad, April 13, 2025: Technical-level discussions between Pakistan and the International Monetary Fund (IMF) are set to commence next week, focusing on the formulation of the federal budget for the fiscal year 2025–26, official sources confirmed on Saturday.
The talks are expected to cover key areas of fiscal reform, particularly tax policy. The government plans to share proposals with the IMF that include withdrawing tax exemptions for new Special Economic Zones (SEZs), introducing a carbon levy on fuel, and offering incentives for electric vehicles as part of a broader green transition agenda.
Senior representatives from the Ministry of Finance and the Federal Board of Revenue (FBR) will lead Pakistan’s side in the negotiations. According to sources, significant progress has already been made in drafting a new tax framework aimed at broadening the tax base and increasing revenue collection in line with IMF recommendations.
Officials revealed that no new tax incentives will be granted to upcoming economic and export processing zones, while existing benefits for SEZs will be gradually phased out by 2035.
As part of Pakistan’s climate financing commitments, a carbon levy of Rs5 per litre on petrol and diesel is under serious consideration. This measure is expected to not only generate revenue but also help reduce carbon emissions and promote energy transition.
The upcoming technical discussions are seen as crucial ahead of higher-level policy talks, and may play a key role in determining the contours of Pakistan’s ongoing engagement with the IMF under any extended or future bailout programme.
