IMF proposes tougher fiscal conditions for Pakistan, including energy price hikes

The International Monetary Fund (IMF) has proposed new financial conditions for Pakistan, calling for major structural reforms alongside continued increases in electricity and gas prices, according to reports.

Under the proposed framework, the IMF has suggested that Pakistan set a Federal Board of Revenue (FBR) tax target of Rs15,267 billion for the upcoming fiscal year. In addition, the government may need to impose around Rs430 billion in additional taxes, including Rs215 billion through new tax measures and Rs115 billion through enforcement actions.

The report further indicates that Pakistan could collect approximately Rs1,727 billion through petroleum levy, a move that is expected to add further pressure on inflation and household costs.

The IMF’s conditions reportedly extend beyond taxation and revenue measures. They include parliamentary approval of the federal budget, strengthening anti-corruption mechanisms, improving transparency in public procurement systems, and reforms to enhance the overall tax structure.

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Additional governance-related requirements involve increasing the independence and transparency of the National Accountability Bureau (NAB), amending Public Procurement Regulatory Authority (PPRA) rules, and developing a roadmap for gradually liberalising the currency exchange system.

In the energy sector, the IMF has reportedly called for regular adjustments in gas and electricity tariffs on both annual and semi-annual bases. It has also proposed the gradual withdrawal of incentives offered in special economic zones by 2035.

Authorities maintain that these measures are aimed at stabilising Pakistan’s economy, improving fiscal discipline, and ensuring long-term sustainability. However, economists warn that such reforms could further increase the financial burden on consumers in the short term, especially amid already high inflation and rising utility costs.

The proposed conditions come at a time when Pakistan continues to rely on IMF support to manage external financing gaps and maintain macroeconomic stability, highlighting the ongoing tension between reform requirements and public affordability concerns.