Plan also includes creation of an “EV Fund” to spur electric transport adoption
ISLAMABAD:
The government is considering imposing a five-year levy on all petrol and diesel vehicles—both imported and locally assembled—to encourage the use of electric vehicles (EVs) across the country. Alongside this proposed levy, the government has decided to set up an “EV Fund” to accelerate electric transport adoption.
If the plan goes ahead, the levy is expected to generate Rs25–30 billion annually, totaling around Rs125–150 billion over five years. The money will be used to implement the new Electric Vehicle Policy for 2026–30.
Meanwhile, sources in the Finance Ministry report that the International Monetary Fund (IMF) has raised concerns over Pakistan’s plan to use surplus electricity for Bitcoin mining and AI operations.
The IMF has demanded explanations for not being consulted on these uses of electricity, as well as on the proposed electricity tariffs. A virtual meeting is set to discuss this issue specifically.
The IMF is also seeking details about how electricity has been allocated for cryptocurrency operations, especially since crypto is unregulated in Pakistan. The IMF has emphasized that all decisions under the loan program should be taken only after prior consultation. Sources said Pakistan’s economic team is facing intense scrutiny during budget negotiations, and further tough discussions with the IMF on electricity usage are anticipated.
According to insiders, several key economic targets for the budget have already been finalized in collaboration with the IMF. Talks on other aspects are ongoing and are expected to wrap up soon. The government is also considering offering incentives for local manufacturing of batteries and chargers for laptops and smartphones.
Virtual consultations between Pakistan and the IMF on budget proposals for the upcoming fiscal year are underway, with an outcome expected shortly. The draft budget will likely be finalized next week.
Pakistan and the IMF have agreed to continue virtual discussions on all outstanding issues.
For the federal budget for the 2025–26 fiscal year, the government is expected to set a GDP growth target of 4.2%, an inflation target of 7.5%, agricultural growth at 4.5%, industrial growth at 4.4%, and services sector growth at 4%.
On June 2, the Annual Plan Coordination Committee (APCC) will meet to finalize the Public Sector Development Program (PSDP) and annual development plans. Later that week, the National Economic Council (NEC), chaired by the prime minister, will review and approve the PSDP, annual development plans, and the Medium-Term Budgetary Framework. If needed, adjustments or increases in development funding will also be approved by the NEC.
The Economic Survey, outlining this fiscal year’s performance, will be released on June 9. The federal budget will be presented in parliament on June 10, following cabinet approval in a special session.
