The government is considering a new local tax on Islamabad residents if the capital is given the status of a separate administrative unit, according to Ministry of Finance sources.

The proposed tax would help finance the capital’s administrative system and public services. The revenue would be spent on hospitals, schools, welfare programs and infrastructure in Islamabad.

The proposal is expected to be discussed with the International Monetary Fund (IMF) during its upcoming review talks with Pakistan.

The government is considering including the tax in the next federal budget. However, officials have not yet determined how much money would be required to run the proposed administrative setup.

The proposal will first be reviewed by a subcommittee dealing with Islamabad’s taxation matters. It would then be sent to a committee headed by Planning Minister Ahsan Iqbal and later to Prime Minister Shehbaz Sharif.

A final decision on the proposed tax will depend on the government’s discussions with the IMF.