After missing 11 performance criteria, the government has endorsed 11 revised structural targets with extra tax steps and spending trims beginning early next month to counter revenue deficits and maintain the $7 billion Extended Fund Facility. Combined with two prior actions such as releasing a governance report and recapitalizing a bank these enabled a staff-level accord for the second review and $1.2 billion payout, as detailed in Thursday's IMF papers.
To tackle Rs430 billion FBR shortfalls in FY26's initial five months and Rs104 billion from captive power levy gaps, plans involve boosting excise on fertilizers, pesticides, and sugary goods, applying 18% GST to select items, and delaying expenditures if the National Tariff Policy underdelivers. Waivers address lapses in social program outlays, primary deficits, and tax filer growth, with FBR set to advance three priority reforms by March 2026.
Ongoing pledges include a tax policy office's medium-term plan by December 2026, agriculture tax via FBR-provincial data links, SEZ incentive review and phase-out by 2035, bond market action plan by September 2026, remittance cost study by May 2026, forex market enhancements, Disco privatizations in early 2026, Hesco/Sepco prep by year-end, civil servant asset disclosures by December 2026, NAB risk mitigation by October 2026, and SOE/SWF law updates by August/March 2026
