Karachi, July 15, 2025 – The International Monetary Fund (IMF) has raised serious concerns over Pakistan's decision to import 500,000 metric tonnes of sugar without taxes, citing a breach of commitments under the $7 billion bailout agreement.

Despite prior pledges to avoid preferential tax treatment and state-led commodity purchases, the federal cabinet approved the tax waiver last week, citing a “food emergency.” This decision follows the earlier export of 765,000 tonnes of sugar, which drove prices to a record Rs200/kg.

The IMF reportedly rejected Pakistan's justification and objected to the lack of consultation. The move violated clear programme terms, which prohibit new tax exemptions or market interventions. The Federal Board of Revenue (FBR) slashed duties and sales tax to 0.25%, drawing immediate IMF criticism.

Sources say the Finance Ministry warned the Prime Minister’s Office post-facto, stressing the breach could derail the IMF programme. The Trading Corporation of Pakistan (TCP) has already issued tenders for 300,000 tonnes, while potential rollback options are under consideration, including canceling private sector waivers.

With the IMF mission led by Eva Ghirmai monitoring closely, the government faces rising scrutiny and must now choose between market stability and fiscal credibility.