IMF Says No to Cheaper Condoms in Pakistan, Turns Down Shehbaz Sharif's GST Cut Proposal

New Delhi: Pakistan’s government has suffered a setback in its bid to make contraceptives more affordable, after the International Monetary Fund (IMF) refused a request to reduce the 18 percent General Sales Tax (GST) on condoms and other birth-control supplies, leaving the coalition government under Prime Minister Shehbaz Sharif in huge embarrassment.

The Federal Board of Revenue (FBR) had formally approached the IMF at its Washington headquarters via email, seeking approval to abolish or reduce GST on contraceptives, estimating the revenue loss from such relief at between 400 million Pakistani Rupee and 600 million Pakistani Rupee. Pakistani officials also raised similar proposals to reduce GST on sanitary pads and baby diapers.

In response, IMF officials flatly rejected the request, saying tax exemptions cannot be granted mid-fiscal year under the ongoing programme and stressing that any such measure can only be discussed during preparations for the next federal budget (2026-27). They also warned that granting exemptions could complicate tax enforcement and encourage smuggling of these products.

IMF’s refusal comes at a time when Pakistan is struggling economically and is currently operating under a bailout programme valued at about $7 billion, which includes strict conditions on tax policy, revenue targets and fiscal discipline.

In the last 18 months, IMF compliance requirements for Pakistan have reportedly reached more than 60 conditions, with 11 new ones added recently, including efforts to crack down on corruption.

The refusal has drawn criticism from public health advocates, who argue that keeping contraceptives expensive may undermine family planning efforts in Pakistan, a nation facing one of the world’s fastest population growth rates.

The country’s population is growing at an estimated rate of 2.55 percent annually, with nearly six million people added each year, placing increasing pressure on public services such as health, education and infrastructure.

Government sources acknowledged the IMF’s stance but said they would continue to engage with the lender ahead of next year’s budget cycle, hoping to push for tax relief measures that could benefit low-income families and support national demographic objectives.

Despite the setback, Islamabad remains committed to meeting IMF conditions to avoid default and stabilize the economy, with officials emphasizing that cooperation with the international lender is essential for Pakistan’s fiscal health.

ALSO READ: 'Rich And Powerful Men Will Be Held Accountable': US Rep Ro Khanna Ahead Of Epstein Files Release