IMF makes new calls for from Pakistan underneath $7 billion mortgage program

ISLAMABAD: The sequence of calls for from the Worldwide Financial Fund continues, as new circumstances linked to Pakistan’s $7 billion mortgage program have come to mild, probably impacting the nation’s rising electrical and hybrid car business.
In accordance with sources, the IMF has demanded the abolition of gross sales tax exemptions on domestically manufactured electrical automobiles and electrical bikes. The proposal requires the imposition of the usual 18% Basic Gross sales Tax (GST) from the 2026-27 fiscal yr.
The IMF has additionally urged Pakistan to finish tax exemptions on domestically manufactured hybrid electrical automobiles, sources revealed. At the moment, these automobiles take pleasure in tax aid underneath particular provisions aimed toward selling cleaner transportation.
At current, domestically manufactured hybrid electrical automobiles are totally tax-exempt till June 30, 2026. After that interval, a gross sales tax of 8.5% applies to hybrid automobiles as much as 1,800cc, whereas automobiles as much as 2,500cc are taxed at 12.75%.
Sources stated the IMF raised these calls for throughout talks with the Ministry of Industries and Manufacturing. The lender has referred to as for the removing of gross sales tax exemptions from the Eighth Schedule of the Gross sales Tax Act and their inclusion within the regular tax regime.
Regionally manufactured hybrid electrical automobiles and bikes are at present exempt from gross sales tax underneath the Eighth Schedule. The IMF now needs this exemption eliminated, successfully bringing these automobiles underneath the usual GST framework.
If accepted by the federal government, the tax exemption on domestically manufactured hybrid electrical automobiles and electrical bikes will finish from subsequent yr. The transfer may considerably have an effect on costs, client demand, and Pakistan’s transition towards environmentally pleasant transport. -NNI