The Pakistani government and the International Monetary Fund (IMF) have agreed to increase petroleum-related taxes in the next fiscal year. Sources say both sides discussed applying a Rs5 carbon levy on petroleum products. The proposal also includes raising the petroleum levy to more than Rs100 per litre. These steps aim to meet IMF revenue targets.
Besides fuel taxes, the IMF asked for broader tax reforms. One key demand is ending tax exemptions for the former FATA and PATA regions. These areas currently enjoy special tax relief. However, the IMF believes all regions should follow the same rules. This move could increase overall tax collection.
The IMF also recommended a major change in vehicle import duties. It wants used cars to remain 40% more expensive than new ones. But this gap will reduce by 10% each year. By 2030, both new and used cars will have equal duty rates. The plan encourages buyers to choose newer, cleaner vehicles.
Furthermore, the IMF pushed for higher taxes on fertilizer. It asked the government to apply the general sales tax (GST) on fertilizer products. This would raise prices for farmers. But the government may face pressure to balance farmer support with revenue goals.
These proposals are part of broader reforms under the IMF program. The government is trying to secure future loan support. However, some changes could raise costs for citizens. The next budget will show how the government balances reforms with relief.