The federal government of Pakistan has assured the International Monetary Fund (IMF) of full compliance with its ongoing loan program. Officials said close coordination with provincial governments will ensure smooth implementation of all conditions.
The Ministry of Finance confirmed that all four provinces will cooperate to meet IMF program requirements. Provincial governments will avoid any policy decisions that contradict the program, and the IMF will be consulted on all major decisions.
Under the National Fiscal Package, expenditures are being transferred to provinces, while the National Finance Commission (NFC) framework is being used to strengthen fiscal discipline at both federal and provincial levels. The Finance Ministry said additional steps will be taken if required to achieve fiscal and structural goals.
The ministry will act as the sole channel of communication between provinces, federal ministries, and the IMF. Officials also confirmed that tax data exchange between the Federal Board of Revenue (FBR) and provincial authorities will be fully operational by May 2026. Provinces have prepared reform plans for agricultural income tax to reduce evasion and improve revenue collection.
General sales tax (GST) laws will be harmonized across all provinces, with the National Tax Council deciding on changes to the negative list. Timely and accurate economic data will be shared with the IMF to support program monitoring.
An IMF report noted that Pakistan has achieved most targets under the second review of its debt program. Key reforms included agricultural income taxation, budgetary measures, asset declaration amendments, and energy sector payment targets. Some targets, such as excise duties on fertilizers and certain exemptions, remain pending.
Pakistan has also assured the IMF that electricity and gas prices will be increased as scheduled. Authorities plan to boost tax revenue, reform the energy sector, curb circular debt, and expand monitoring of high-value sectors including cement, sugar, and large retailers.
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These measures aim to close Pakistan’s tax revenue gap, strengthen fiscal discipline, and ensure the successful implementation of IMF-supported reforms.
