A recent report by the International Monetary Fund (IMF) has called on Pakistan to take immediate steps to reduce corruption in its top tax agency and to improve how public finances are managed.
The report, submitted to the Finance Division, focuses on governance and corruption in Pakistan, with particular attention on the Federal Board of Revenue (FBR). Among the key proposals, the IMF advised cutting back on tax exemptions and special tax treatments that benefit certain sectors.
The fund also suggested phasing out advance and additional withholding taxes, asking the FBR to submit a clear strategy to that effect.
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In a move aimed at better governance, the IMF recommended that tax policymaking be handled separately from FBR’s enforcement functions. The Fund also called for legal reforms to give full independence to the Auditor General of Pakistan, while suggesting tighter rules on supplementary budget grants that bypass parliament.
The IMF mission, which met with around 30 departments during a visit in April, issued these recommendations as part of a broader reform framework tied to Pakistan’s IMF loan programme.
The Finance Ministry has been asked to prepare a public action plan and report progress by May 2026. The report is seen as a critical tool in guiding future structural reforms and ensuring fiscal discipline.