As part of its upcoming fiscal strategy, the federal government is exploring a five-year levy on petrol and diesel vehicles to promote the adoption of electric vehicles (EVs) and reduce dependency on fossil fuels.
Insiders revealed that this levy, if included in the 2025-26 federal budget, could apply to both imported and locally assembled vehicles that run on gasoline or diesel. The government expects to collect Rs25-30 billion annually, totaling up to Rs150 billion over five years.
The revenue will be used to establish an Electric Vehicle Fund and support the implementation of a comprehensive EV Policy (2026-2030) aimed at accelerating the transition toward electric mobility.
While EV promotion remains a central theme, the government is simultaneously dealing with pushback from the International Monetary Fund (IMF) regarding its plans to utilize idle electricity for Bitcoin mining and artificial intelligence operations.
According to Finance Ministry officials, the IMF was not consulted on these initiatives and has requested an official explanation, particularly since cryptocurrency remains unregulated in Pakistan. A virtual meeting is scheduled between the government and the IMF to address these electricity-related proposals and tariff plans.
The IMF has reminded Pakistan that all decisions under its loan program must involve prior consultation. Negotiators from Pakistan’s economic team are currently engaged in challenging talks with the lender, and further tough discussions are expected in the days ahead.
Sources close to the matter said that many of the key budgetary targets have already been determined in agreement with the IMF, while other details remain under negotiation.
Alongside energy and fiscal policies, the government is also considering incentives for domestic production of batteries and chargers for laptops and smartphones, part of its broader digital and industrial strategy.
In the 2025-26 federal budget, the government is likely to aim for the following:
The Annual Plan Coordination Committee (APCC) will meet on June 2. It will finalize the Public Sector Development Program (PSDP) and other development plans. Later that week, the National Economic Council (NEC) will hold a meeting. The Prime Minister will chair it. The NEC will approve the proposals, including any changes in development funding.
The Economic Survey reviewing the current fiscal year’s performance will be unveiled on June 9. The federal budget for 2025-26 will be formally presented in Parliament on June 10. This will follow its approval by the federal cabinet in a special session.