The International Monetary Fund (IMF) has reportedly declined Pakistan’s request to continue sales tax exemptions on hybrid and electric vehicles in the upcoming federal budget. According to sources, the IMF is pushing for a broader tax base and fewer exemptions as part of fiscal reforms aimed at increasing government revenue. The move could make hybrid and electric vehicles more expensive for consumers, potentially affecting the country’s efforts to promote environmentally friendly transportation. The final decision is expected to be reflected in the FY2026-27 budget, which is set to be announced soon. Economic experts believe the development highlights the challenges Pakistan faces in balancing green energy goals with IMF-backed fiscal commitments.
