Islamabad — The International Monetary Fund (IMF) has expressed serious concerns over Pakistan’s recent policy of allowing tax-free imports of sugar, warning that such measures could undermine the country’s economic stability and fiscal discipline.
The IMF pointed out that the exemption of sugar imports from taxes contradicts Pakistan’s ongoing efforts to broaden the tax base and improve revenue collection. This policy risks increasing the country’s fiscal deficit and destabilizing the domestic sugar market.
Pakistan’s sugar industry has been grappling with supply shortages and rising prices, prompting the government to permit tax-free sugar imports in an attempt to control inflation. However, the IMF has cautioned that this short-term relief may lead to longer-term economic challenges, including market distortions and reduced incentives for local producers.
The fund urged the Pakistani government to reconsider such exemptions and instead focus on comprehensive structural reforms to ensure sustainable economic growth and fiscal health.
The IMF’s remarks come amid ongoing negotiations with Pakistan over the economic reform program tied to bailout funds, emphasizing the need for consistent policy measures aligned with fiscal responsibility.
