IMF rejects Pakistan’s GST cut on condoms, contraceptives; high prices to continue amid rising population and inflation. Photos: X.
The International Monetary Fund (IMF) has rejected the Shehbaz Sharif government’s proposal to slash the General Sales Tax (GST) on condoms and other contraceptives. The IMF directed Pakistan to maintain high prices for contraceptives despite the cash-strapped country grappling with one of the world’s highest population growth rates and rising inflation.
According to reports by Pakistan-based The News, condoms are currently taxed 18% GST, and the IMF has firmly opposed any relaxation ahead of the upcoming budget.
Prime Minister Shehbaz Sharif had sought to make family planning products more affordable by proposing the removal of the 18% GST on condoms and other contraceptives.
“Any deviation from the agreed-upon tax framework could jeopardise the country’s fragile economic recovery under the current $7 billion bailout programme,” IMF, the global lender, reportedly told Pakistani officials.
Officials also proposed similar tax reductions on sanitary pads and baby diapers, but these measures were also rejected. The IMF cautioned that such reliefs could complicate tax enforcement and encourage smuggling.
Pakistan is bound to follow IMF guidelines because of its ongoing bailout programme, which imposes strict conditions on taxation, spending, and revenue collection.
The Federal Board of Revenue (FBR) had approached the IMF headquarters in Washington, D.C., via email, seeking GST relief on contraceptives. The FBR estimated the revenue impact of the proposed relief at PKR 400–600 million.
A virtual meeting was held to convey Prime Minister Sharif’s request. However, the IMF rejected it, stating that mid-fiscal-year tax reductions were not feasible, particularly when Pakistan is already struggling to meet revised revenue targets.
Pakistan’s population continues to grow at a staggering rate of 2.55% annually, adding nearly six million people each year.
Recently, the IMF imposed 11 additional conditions on Pakistan under its $7 billion bailout programme aimed at cracking down.
Zubair Amin is a Senior Journalist at NewsX with over seven years of experience in reporting and editorial work. He has written for leading national and international publications, including Foreign Policy Magazine, Al Jazeera, The Economic Times, The Indian Express, The Wire, Article 14, Mongabay, News9, among others. His primary focus is on international affairs, with a strong interest in US politics and policy. He also writes on West Asia, Indian polity, and constitutional issues. Zubair tweets at zubaiyr.amin
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