Pakistan has failed to secure approval from the International Monetary Fund to cut the 18 percent GST on condoms and other contraceptives. The request was made by Prime Minister Shehbaz Sharif earlier this year. The IMF told Islamabad that any tax change must wait for the next budget cycle. The issue matters because contraceptive prices stay high as Pakistan faces fast population growth.
The IMF decision comes at a time when Pakistan depends on global lenders to keep its weak economy afloat. According to Reuters, the IMF has linked its loan support to strict financial reforms. This includes revenue collection, governance steps, and steps to fix loss-making state firms. The GST issue falls under these rules, so the IMF refused to allow a mid-year exemption.
IMF Tax Rules Leave Pakistan With No Relief on Contraceptives
The IMF said Pakistan cannot change GST rates during the fiscal year. The lender told officials that such relief can only be reviewed in the next budget. Pakistani media reports said the Federal Board of Revenue warned that removing GST on condoms would cost up to Rs 600 million. The IMF said this loss is not acceptable while Pakistan struggles to meet its revenue goals.
The government also asked for cuts on GST for sanitary pads and baby diapers. These requests were rejected as well. The IMF argued that sudden tax breaks could disrupt enforcement and may even lead to smuggling. According to reports from AP, Pakistan has one of the fastest population growth rates in the world. High prices for contraceptives make family planning harder for many families.
The IMF says Pakistan must stay focused on revenue targets. Islamabad recently accepted tough conditions under a multibillion‑dollar support plan. These include tax reforms, energy pricing changes, and privatisation of state assets. The IMF says these steps are needed to prevent another balance‑of‑payments crisis.
Impact on Pakistan’s Economy and Public Services
The decision keeps pressure on Pakistan’s family planning system. The country adds millions of people each year. Health and education services already face strain. Many experts say lower contraceptive costs would help poorer families manage household needs. But the IMF says stability comes first.
Privatisation is also moving ahead. Pakistan International Airlines is now set for sale under IMF terms. Bids for the airline will open soon as part of a wider reform plan. The government has agreed to give buyers major control to reduce state losses. Reports from Reuters say the airline has been burdened by years of debt and mismanagement.
The IMF’s refusal on GST cuts shows the tight rules Pakistan must follow. Tax relief is unlikely until the next fiscal year. The government must now balance public pressure with lender demands. Many households will continue to pay higher prices for basic contraceptive goods.
Pakistan now faces a hard road. The IMF GST decision adds new pressure on families and the wider economy. The main keyword “IMF GST decision” will remain central as Pakistan prepares for its next budget cycle.
FYI (keeping you in the loop)-
Q1: What is the IMF GST decision?
The IMF GST decision refers to the IMF refusing Pakistan’s request to cut the 18 percent GST on contraceptives. The lender said such changes must wait for the next budget. It did not allow a mid-year exemption.
Q2: Why did Pakistan ask for a GST cut?
Pakistan wanted to make contraceptives cheaper. The government said high prices hurt family planning efforts. The IMF did not agree to the timing.
Q3: How will this decision affect people?
Contraceptives will stay costly for many families. This makes population control harder. Public services may face more pressure.
Q4: What other reforms has the IMF asked for?
The IMF asked for tax reforms and privatisation. It also wants better revenue collection. Pakistan must follow these terms to keep loan support.
Q5: Will GST cuts be possible later?
The IMF said the idea can be studied during the next budget. Pakistan will need to present a full fiscal plan. Relief is not possible before that.
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