Pakistanis to sweat more as IMF turns down Shehbaz Sharif’s request to slash taxes on condoms
IMF informed Islamabad that any exemption or reduction in taxes on contraceptives can only be considered during the next federal budget cycle
The International Monetary Fund (IMF) has rejected Pakistan’s request to immediately withdraw the 18 per cent General Sales Tax (GST) on condoms and other contraceptives, dealing a setback to the government’s efforts to make birth-control products more affordable amid rapid population growth.
According to reports, the IMF informed Islamabad that any exemption or reduction in taxes on contraceptives can only be considered during the next federal budget cycle. The lender cited Pakistan’s struggle to meet revised revenue targets under its ongoing bailout programme and warned that tax relief could weaken enforcement and increase the risk of smuggling.
Prime Minister Shehbaz Sharif’s government had sought relief from the GST, arguing that the tax—introduced through successive mini-budgets to satisfy IMF revenue conditions—has effectively turned essential reproductive health products into luxury items, placing them beyond the reach of low-income households.
Pakistan’s Federal Board of Revenue (FBR) raised the issue with IMF officials in Washington through email correspondence and a virtual meeting. The proposed exemption was estimated to result in a revenue loss of PKR 400–600 million. The IMF ultimately rejected the request and also opposed similar proposals to reduce taxes on sanitary pads and baby diapers.
The decision comes as Pakistan grapples with a major demographic challenge. With a population growth rate of around 2.55 per cent, the country adds nearly six million people each year, increasing pressure on public services and household finances.
Pakistan remains heavily dependent on IMF support to stabilise its fragile economy. Under a 37-month Extended Fund Facility (EFF) and a Resilience and Sustainability Facility (RSF), the IMF has so far disbursed about $3.3 billion, with an additional $1.2 billion approved later. In return, Islamabad is required to follow strict conditions on taxation, spending, and fiscal discipline.
