The statement of issues about the EFF says that viewing the measures as sudden and unexpected reflects a lack of knowledge of the facts.
Finance Minister Muhammad Aurangzeb speaks during an interview with Reuters at the 2025 IMF and World Bank Annual Spring Meetings in Washington, DC, US, April 25, 2025. Photo: Reuters/File
The Ministry of Finance clarified, in a statement on Sunday, that there is nothing new in the conditionalities of the IMF’s Expanded Fund Facility (EFS). He stated that the Memorandum of Economic and Financial Policies (MEFP) is a continuation of the agreed reform agenda that is being implemented gradually for the economic stability and sustainable growth of the country.
At the beginning of the IMF program, the Government of Pakistan presented its reform policy proposal, which the IMF incorporated into the MEFP in phases. The ministry stated that considering them as sudden or unexpected new conditions reflects a lack of knowledge of the facts.
Read: IMF conditionalities
The SAF reflects an agreed medium-term reform strategy, and the government is already implementing many of the reforms included in it. Medium-term structural reforms are implemented in phases, and each IMF review includes new measures to gradually achieve the final objectives agreed upon at the beginning of the program.
The MEFP agreed upon after the second review is a continuation of the MEFP from the first review, the ministry said. The issue of the publication of asset declarations of public employees was included in the EFF from May 2024, with the current structural benchmark being the next logical step after the amendments to the Public Servants Law of 1973.
In previous reviews it was agreed to improve the performance and autonomy of the NAB. Strengthening the performance of the NAB and cooperation with other investigative agencies is part of this continuity, a measure that was agreed before the Governance and Corruption Diagnostic Report. Granting provincial anti-corruption establishments access to financial information is part of the anti-money laundering and counter-financing of terrorism (AML/CFT) reforms, which have been part of the EFF program from the beginning, the ministry clarified.
The government discouraged informal channels to increase remittances, resulting in a 26% year-on-year increase in fiscal year 2025, and a 9.3% increase in remittances is expected in fiscal year 2026. The government, in collaboration with the State Bank, is working to reduce the cost of remittances, and the IMF includes these measures in the MEFP.
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The ministry noted that a study for the development of the local currency bond market was recommended in May 2025 and has now been included in the program as a structural benchmark.
Furthermore, the statement highlighted that the reforms in the sugar sector are an initiative of the government of Pakistan itself, with the Prime Minister’s Office constituting a task force under the leadership of the Energy Minister. The task force is preparing recommendations in consultation with the provinces. This initiative is aligned with the objectives of the SAF, aimed at reducing government intervention in commodity markets, which is why the IMF has included it in the MEFP.
The reforms in FBR are part of the broader revenue improvement agenda of the government, whose task force is headed by Prime Minister Shehbaz Sharif himself, the ministry said. During the past year, the Transformation Plan was approved, the Tax Policy Office was created and measures were undertaken such as improvements in compliance risk management.
Separating tax policy from the operational functions of the FBR was an important step, and the preparation of the medium-term tax reform strategy was a continuation of this process.
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Privatization of distribution companies (DISCO) has also been part of the EFF program since its inception and will be carried out in phases. According to the statement, finalizing the terms for private sector participation in the privatization of Hyderabad and Sukkur power supply companies is an agreed measure. The agreements on public service obligations for seven major DISCOs are also a continuation of the agreed measures.
The amendments to the Companies Act, 2017 for regulatory reforms and improving the business environment are part of broader reforms. The concept note on amendments to the Special Economic Zones (SEZ) Act is the next stage after the previous SEZ review study.
The Ministry noted that alternative measures in case of potential revenue shortfalls have always been part of the MEFP, and the initial May 2024 MEFP also includes a structural benchmark to introduce a 5% federal excise tax on agricultural fertilizers and pesticides.
