Major economic shifts are on the horizon as crucial talks between the Pakistani government and the IMF's technical team are set to begin on Monday, focusing on the upcoming federal budget and sweeping tax reforms.

According to government insiders, top officials from the Ministry of Finance and the Federal Board of Revenue (FBR) will participate in these discussions. Key agenda items include broadening the tax base, introducing new revenue measures, and reviewing tax incentives for special economic and export processing zones.

Sources reveal that to tackle climate change, the government is considering imposing a Rs 5 per litre carbon levy on petrol and diesel. If finalised, the levy will be integrated into the Finance Bill 2025, potentially affecting fuel prices and consumer budgets directly.

In a welcome development for green projects, the government is also looking at tax breaks for electric vehicles under the National Electric Vehicle Policy 2025-30. Plans to set up EV charging stations in the country are in progress, encouraging cleaner mobility.

Furthermore, the budget could see aggressive moves to include retailers, wholesalers, and other businesses in the tax net, seeking to raise revenues and make the economy formal.