The International Monetary Fund (IMF) has imposed additional conditions on Pakistan for the next tranche of its $7 billion loan programme, urging stronger tax reforms and measurable results.
The development comes as virtual economic review talks between the two sides continue.
Pakistan and the IMF are currently engaged in virtual economic review talks under the ongoing programme.
According to officials, the IMF has asked for more time before reaching a staff-level agreement. However, the Finance Ministry says that if progress is made in negotiations, an agreement could be finalized soon.
Focus on curbing tax evasion
The IMF has directed Pakistan to introduce a modern system to effectively check tax evasion. It has also stressed the need to accelerate the implementation of a digital invoicing system to improve transparency and documentation in the economy.
As part of the new conditions, it has been decided to tighten monitoring of production and sales in factories and shops.
The Federal Board of Revenue (FBR) has also agreed to make online reporting of business sales mandatory to ensure better compliance. Officials revealed that currently only one-third of businesses are providing complete data, highlighting significant gaps in reporting.
IMF pushes for audit reforms
The IMF has suggested making risk-based audits mandatory to improve tax collection efficiency. There is also a possibility of setting specific revenue targets from tax audits, aimed at boosting government income.
However, FBR officials noted that taxpayers often create hurdles in recovery by taking matters to court, which delays the process.
The IMF has expressed serious concern over the FBR’s failure to meet tax targets. It has called for stricter monitoring mechanisms under the $7 billion programme and emphasized the need for tangible outcomes rather than commitments.
The global lender has clearly stated that Pakistan must demonstrate practical results instead of relying on promises.
Path forward for loan programme
With negotiations ongoing, officials say the possibility of a staff-level agreement remains open if both sides reach consensus on the new conditions.
The outcome of these talks will be crucial for Pakistan’s access to the next tranche of the IMF loan programme.
