ISLAMABAD: Pakistan has opposed a proposal made by the International Monetary Fund (IMF) seeking imposition of carbon levy on petroleum products, coal and vehicles.
Sources said the IMF delegation, which is in Pakistan for an economic review under the $7 billion loan deal, had proposed increasing the current petroleum levy rate of Rs60 per litre to Rs70 during a period of three years. It suggested that the levy could be increased by Rs3 per litre in first year.
The revenue, it said, could be used for green energy in the country.
Furthermore, the IMF wanted the Pakistan government to increase federal excise duty on cars featuring internal combustion engines and label it as “carbon levy”.
The proposals were discussed in meetings held by the IMF delegation with officials of the Ministry of Petroleum, Ministry of Finance, Ministry of Climate Change, Ministry of Industries and the Federal Board of Revenue (FBR) on Friday.
The Pakistani officials have not accepted the proposal as they expressed reservations on utilization of funds to be collected under the head of environment protection and approach for cooperation between federal and provincial governments.
Sources said the proposal regarding imposition of carbon levy on coal is problematic itself since it comes under domain of provinces.
However, the FBR officials have supported the proposal to increase FED on cars.
In Pakistan, heavy taxes are already collected on cars, making them the 36 to 45 percent of the vehicle’s prices. The government currently collects advance income tax, sales, tax, FED and registration fee from buyers of new cars.
