Islamabad: The International Monetary Fund (IMF) has expressed serious concerns over Pakistan’s recent decision to import 500,000 metric tonnes of sugar without taxes, saying the move violates key commitments under the ongoing $7 billion bailout programme.
The issue came into focus after sugar prices hit a record high of Rs 200 per kg, according to the latest inflation data from the Pakistan Bureau of Statistics. In response to the surge and tight domestic supply, the federal government waived nearly all import taxes to allow the sugar inflow, prompting strong objections from the IMF.
Government sources told The Express Tribune that the IMF rejected Pakistan’s justification that the decision was taken under a food emergency. The Federal Board of Revenue (FBR) had written to the IMF defending the move, but the Fund did not accept the explanation.
The current supply crunch stems from the government’s earlier approval to export 765,000 metric tonnes of sugar, which contributed to the shortage and price rise. According to officials, the IMF’s response aligns with the Finance Ministry’s own warning that recent actions could derail the bailout programme.
Last week, the federal cabinet approved the sugar import plan and removed nearly all taxes in an attempt to lower the price of imported sugar by roughly Rs 82 per kg.
Following the decision, the FBR issued three separate notifications lowering import duties to zero and reducing sales and withholding taxes to 0.25%, mainly for documentation purposes. The waivers apply to both the state-run Trading Corporation of Pakistan (TCP) and private importers.
However, these moves directly conflict with IMF programme conditions. According to official IMF documents, Pakistan agreed not to issue any new tax exemptions, including zero ratings or special rates, and committed to ending government control over commodity pricing by the end of FY2025-26.
