ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have yet to resolve differences over the country’s proposed new auto policy, according to sources in the Finance Ministry.
The sources said the IMF continues to raise concerns about the proposed tax treatment of electric vehicles, with the government still undecided on whether to impose an 18% sales tax on electric cars valued up to Rs20 million.
According to the sources, the IMF has proposed increasing the sales tax on an electric vehicle worth $75,000 from 1% to 18%.
The Pakistani government has presented its position on the proposed auto policy during discussions with the IMF. Officials explained that the reduced sales tax on electric vehicles was intended to encourage the adoption of environmentally friendly vehicles.
Pakistan also assured the IMF that vehicle values covered under the proposed scheme would remain unchanged for one year.
Sources in the Ministry of Industries and Production said discussions with the IMF on the new auto policy would continue, indicating that an agreement on the outstanding issues has not yet been reached.
