The federal government is moving swiftly to establish new tax regimes and has decided to seek permission from the International Monetary Fund (IMF) to impose a carbon levy in the upcoming federal budget for 2025-26.

Initial discussions are scheduled for next week during a new round of talks with the Washington-based lender. An IMF delegation is set to arrive today and will begin negotiations on Monday to provide recommendations for implementing the carbon levy.

A technical delegation will engage in discussions with federal and provincial representatives from February 24 to 28. Sources indicate that the talks will focus on green budgeting, tracking climate spending, and establishing reporting mechanisms. In addition to the carbon levy, the discussions will also address topics such as electric vehicles and subsidy frameworks.

The IMF is expected to propose an expansion of green budgeting in the upcoming budget, further emphasizing the importance of sustainable financial practices.