ISLAMABAD – The International Monetary Fund (IMF) has raised serious concerns over the government’s decision to grant tax exemptions on sugar imports, warning that such measures could adversely impact Pakistan’s ongoing $7 billion loan programme.
The sources said that the IMF has conveyed its reservations to the government, stating that allowing duty-free sugar imports constitutes a direct violation of the agreement signed with the Fund.
The government, however, defended its move, citing a “food emergency” and the need to stabilise domestic sugar prices. But the IMF rejected this justification, terming it unsatisfactory.
In response to the Fund’s objections, the government has begun reviewing its decision and is now considering withdrawing the tax relief granted on sugar imports. Officials also confirmed that the entire plan for sugar import may be scrapped.
Sources revealed that the federal cabinet had approved the import of sugar without seeking prior input from the Ministry of Finance, a move that has further complicated the matter.
The government is also re-evaluating tax concessions granted to private sector importers.
The controversy comes at a time when sugar prices have reached an all-time high, surpassing Rs200 per kilogram for the first time in the country’s history.
In an attempt to control prices, the government had earlier announced the import of 500,000 metric tonnes of sugar, waiving all import duties.
The Trading Corporation of Pakistan (TCP) has already issued a tender for the import of 300,000 metric tonnes, with the deadline for submission of bids set for July 18.
