IMF Criticizes Pakistan’s Sugar Tax Waiver Move

Islamabad, July 15, 2025, 04:44 PM PKT — The International Monetary Fund (IMF) has voiced sharp concerns over Pakistan’s decision to waive taxes on importing 500,000 metric tonnes of sugar, labeling it a breach of key commitments under the $7 billion program, per The Express Tribune, citing sources. The Federal Board of Revenue (FBR) justified the move—slashing sales tax from 21% to 0.25% and exempting duties—as a response to a food emergency after earlier sugar exports spiked local prices to Rs200 per kilogram, a historic high. The IMF rejected this, citing a violation of the agreement banning preferential tax treatments and exemptions.

Tensions escalate as the government bypassed IMF consultation, despite Ministry of Finance objections to the Prime Minister’s Office, warning of program risks. A tender for 300,000 metric tonnes with bids due July 18, 2025, proceeds amid a projected 535,000-tonne shortfall by October-November 2025, worsened by last year’s 765,000-tonne export. The government now weighs reversing imports or withdrawing waivers, but no final decision looms. Web context highlights IMF program tensions, while posts found on X show anger—some blame policy flips, others demand transparency. Critically, the narrative of “emergency relief” may mask fiscal mismanagement—web data points to past breaches, and X sentiment suggests distrust in government intent, hinting at escalating strain.