Islamabad :The International Monetary Fund (IMF) has expressed serious concerns over Pakistan’s recent decision to grant tax exemptions on sugar imports, warning that the move threatens the integrity of the country’s ongoing $7 billion bailout program.
In response to skyrocketing sugar prices, which have recently crossed Rs 200 per kilogram, Pakistan’s government waived import duties on 500,000 metric tons of sugar to ease inflationary pressures. However, the IMF criticized this step as undermining fiscal discipline and violating the terms of the financial agreement.
Sources reveal that the cabinet approved the tax waiver without prior consultation with the Finance Ministry, prompting further scrutiny from the IMF. Due to mounting pressure, the government is now reconsidering the tax relief and may halt or revise the sugar import plan altogether.
Meanwhile, the Trading Corporation of Pakistan (TCP) has floated a tender to import an additional 300,000 metric tons of sugar, with bids closing on July 18. The outcome of this tender now hangs in the balance amid the evolving dispute.
The clash highlights the delicate balance Pakistan must maintain between controlling domestic inflation and meeting international financial commitments.
