ISLAMABAD: The International Monetary Fund (IMF) has imposed 11 new structural benchmarks on Pakistan under the latest review of its loan programme, including parliamentary approval of the FY27 budget in line with the Fund’s targets, phase out existing tax incentives for SEZs, revisions in energy tariffs, and amendments aimed at strengthening the autonomy and transparency of the National Accountability Bureau (NAB).
The new conditions were disclosed in the IMF’s third review under the Extended Fund Facility and second review under the Resilience and Sustainability Facility, taking the total number of programme conditions to 55.
According to the report, Pakistan will be required to secure parliamentary approval of a FY27 budget aligned with IMF staff-level understandings, including an underlying primary surplus target of 2% of GDP by the end of June 2026.
The IMF also introduced several governance-related conditions, including submission of amendments to the NAB ordinance to parliament by January 2027.
The proposed amendments require establishment of an open, merit-based and competitive process for appointment of NAB senior management, including pre-defined qualification criteria and selection through a multi-sector stakeholder committee.
The conditions also require publication of NAB investigation and prosecution rules along with annual statistics related to corruption investigations, prosecutions and convictions.
On the fiscal side, Pakistan will also prepare an audit policy and audit manual by August 2026 to centralise audit case selection through the Compliance Risk Management system.
Another benchmark requires amendments to Public Procurement Regulatory Authority rules by September 2026 to eliminate preferences given to state-owned enterprises in public procurement contracts awarded without competition.
The IMF programme also includes several energy sector conditions aimed at maintaining cost-recovery tariffs.
Pakistan will notify a semi-annual gas tariff adjustment by July 1, 2026, followed by another revision by February 15, 2027. The annual electricity tariff adjustment is scheduled to be notified by January 15, 2027.
In the monetary and financial sector, the State Bank of Pakistan has been tasked with preparing a roadmap for gradual liberalisation of the foreign exchange regime by March 2027, including sequencing and preconditions linked to macroeconomic and financial stability.
The IMF also directed Pakistan to maintain the purchasing power of the Benazir Income Support Programme’s Kafaalat unconditional cash transfer through inflation-linked adjustments by January 2027.
On trade and investment policy, Pakistan will amend the Special Economic Zones Act to phase out existing tax incentives for SEZs and shift from profit-based to cost-based incentives under an agreed transition plan.
The reforms also include discontinuation of tax incentive powers currently exercised by SEZ authorities, the Board of Investment and other related bodies.
In addition, amendments to the Special Technology Zones Authority Act will phase out all existing fiscal incentives for technology zones by 2035, according to the IMF report.
