The International Monetary Fund (IMF), in its Governance and Corruption Diagnostic Assessment Report on Pakistan, has called for strict implementation of the National Tariff Policy 2025–30, stressing that reforms to simplify and rationalize the tariff structure must continue without delay.
Key IMF Recommendations
According to the report:
- The National Tariff Commission (NTC) must reduce its dependence on external consultants.
- The NTC should limit the influence of lobbying groups and enhance its internal technical capacity.
- Strengthening the NTC’s institutional credibility and minimizing external pressure are essential for effective tariff governance.
- Pakistan must curb rent-seeking practices and ensure greater transparency in tariff-related decisions.
The IMF noted that persistent weaknesses in customs enforcement are undermining the intended impact of tariff reforms.
Reforms Needed in Customs System
The assessment recommends:
- Addressing structural flaws within the customs framework.
- Abolishing Section 18-A of the Fifth Schedule, which allows certain exemptions.
- Restricting exemptions under Section 19 of the Customs Act, often used to provide discretionary relief.
- Significantly reducing discretionary tax and tariff exemptions to ensure a uniform tariff structure.
Pakistan Accepts IMF Demand for Special Audit of Supplementary Grants
Separately, Pakistan has agreed to a key IMF condition to conduct a special audit of supplementary grants issued over the past 10 years, Finance Ministry sources confirmed last week.
The decision came after the conclusion of 10 days of technical discussions between Pakistan and the IMF.
Focus of the Discussions
The IMF’s technical mission, which arrived on November 11, reviewed progress on:
- Public finance management (PFM) reforms
- Transparency and accountability in the budget process
- Measures to limit the federal government’s discretionary power to issue supplementary grants
Pakistan has also accepted another IMF demand aimed at restricting the government’s authority to approve supplementary grants without parliamentary oversight.
