Pakistan gets IMF nod for sugar import tax relief

ISLAMABAD: The International Monetary Fund (IMF) has lifted its objection to Pakistan’s tax relief on imported sugar, following successful negotiations by the government, ARY News reported citing sources.

The relief, detailed in a FBR notification, reduces the sales tax from 18% to 0.25% and is not part of the national budget or a subsidy program, a stance Pakistan clarified to address IMF concerns over fiscal discipline amid a sugar shortage, the sources within the finance ministry added.

Pakistan plans to import 100,000 tons of sugar in the first phase, costing $56.7 million, with a tax exemption of Rs 1.85 billion.

Earlier, the International Monetary Fund (IMF) expressed reservations over Pakistan’s decision to offer tax exemptions and subsidies on imported sugar, warning that such measures could jeopardise the ongoing $7 billion loan program.

The government of Pakistan has finalized decision to import 200,000 tons of sugar to address the soaring rates in domestic market, ARY News reported.

According to Ministry of National Food Security spokesperson, the final order for the sugar import has been issued, with the first shipment expected to arrive in Pakistan in early September 2025.

The spokesperson stated that the import of sugar is aimed at balancing prices and providing relief to the public.

Additionally, the government has secured a discount on sugar purchases in the international market, which is expected to further ease the financial burden.

The availability of imported sugar is anticipated to stabilize the local market, ensuring steady supply and price control, the spokesperson added.