The International Monetary Fund (IMF) has added 11 new conditions for Pakistan as part of its $7 billion bailout program, bringing total requirements to 64 in just 18 months, increasing pressure on the government to implement reforms.
Focus on Corruption and Transparency
The IMF’s staff-level report, released Thursday, emphasizes tackling corruption, elite capture in the sugar sector, and inefficiencies in the Federal Board of Revenue (FBR). Pakistan must publish high-level federal civil servants’ asset declarations online by December next year. Plans include extending this to provincial officials and granting banks access to records to identify mismatches between income and assets.
By October 2025, the government must publish an action plan addressing corruption risks in 10 key departments, led by the National Accountability Bureau. Provincial agencies will also receive financial intelligence support to strengthen anti-corruption measures.
Power, Finance, and Tax Reforms
The IMF requires a comprehensive review of remittance costs and cross-border payments, with an action plan due by May 2025, as remittance-related losses could reach $1.5 billion. Pakistan must also study obstacles to local currency bond market development, adopt a national sugar policy by June 2025, and implement key FBR reforms with KPIs and legislative changes by December.
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By the same month, the government is expected to publish a medium-term tax reform strategy, finalize private sector participation preconditions for HESCO and SEPCO, and sign public service obligation agreements with seven major entities. Amendments to the Companies Act and a concept note on SEZ Act reforms are also required.
Potential Mini-Budget and Deadlines
If revenue targets are missed by December 2025, Pakistan must introduce a mini-budget, potentially raising excise duties on fertilizers, pesticides, and sugary items, along with widening the sales tax base. The IMF also extended the deadline for the action plan addressing governance and corruption vulnerabilities.
