Dam cess dropped from finance bill as IMF approval remains elusive

ISLAMABAD: The government has failed to make the proposed dam cess part of the finance bill for FY26 because there is no go-ahead from the IMF yet.

However, the Fund is currently in talks with the authorities over the dam cess issue. The government wanted to impose the dam cess to generate enough financing to expedite the construction work of Diamer-Bhasha, Mohmand and Dasu hydropower projects before their deadlines to reduce the impact of Indian manipulation in water releases, causing damage to sowing of crops.

This proposal was generated from the top mandarins of tax collecting agency, the FBR. However, the authorities could not make it part of the finance bill for FY25, which is currently in the National Assembly for approval purposes.

The IMF authorities sent many queries to Pakistan mainly questioning the urgency for imposition of the dam cess. The IMF has been told that India has held the Indus Waters Treaty 1960 in abeyance and is manipulating time to time through dams (water storages) for its hydropower projects erected on Pakistan rivers – Jhelum and Chenab, the water releases which are destined to reach Pakistan and damaging the sowing of crops in Pakistan (Punjab). India did it many times on Chenab river. “India under the Modi administration can go for diversion of waters from Pakistan rivers to its own rivers. Pakistan has already declared the manipulation of water and any diversion of its water as an act of war.”

However, in the winter season, when the