Islamabad, December 12, 2025 – Pakistan has been set 11 new structural benchmarks (SBs) by the International Monetary Fund (IMF) as part of the ongoing Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs.
The benchmarks aim to strengthen fiscal management, governance, financial stability, and economic reforms ahead of the tax year 2026.
The IMF report titled “Second Review under the Extended Arrangement under the Extended Fund Facility, First Review under the Resilience and Sustainability Facility, Request for Waiver of Non-Observance of a Performance Criterion, and Modification of Performance Criteria” highlighted that eight of 13 previous benchmarks had been met. These included the approval of the FY26 budget, implementation of the new agricultural income tax, and amendments to the Civil Servants Act enhancing asset declarations for public officials.
Key Structural Benchmarks (SBs) for Pakistan
1. Fiscal Reforms
• Medium-Term Tax Reform Strategy: Pakistan must develop and publish a 3-5 year tax reform plan by December 2026. The strategy will include tax policy reforms, administrative and legal changes, clear governance, and a resource plan for implementation.
• FBR Effectiveness: Implement at least three priority reform areas identified with IMF staff, including necessary legislation, staffing, and initial KPI reporting.
2. Governance and Anti-Corruption
• Asset Declarations: Publish high-level federal civil servants’ asset declarations online by December 2026 to enhance transparency.
• Corruption Mitigation: Develop and publish an action plan addressing corruption vulnerabilities in government departments based on institutional risk assessments (deadline: October 2026).
3. Monetary and Financial Sector
• Remittances and FX Inflows: Conduct a comprehensive assessment of remittance costs and structural obstacles to cross-border payments, along with an action plan to boost foreign exchange inflows by May 2026.
• Local Currency Bond Market: Study bottlenecks for domestic bond market development and publish a strategic action plan to improve market efficiency and diversify investors (deadline: September 2026).
4. Energy Sector
• Private Sector Participation in DISCOs: Finalize preconditions for private sector involvement in HESCO and SEPCO, enhancing management efficiency by December 2026.
5. State-Owned Enterprises (SOEs)
• Public Service Obligations (PSO): Sign PSO agreements with the seven largest SOEs before submitting the FY27 budget to Parliament, in line with updated SOE manuals and guidelines (deadline: June 2026).
6. Trade, Investment Policy, and Deregulation
• Sugar Market Liberalization: Adopt a national policy detailing licensing, price controls, import/export permissions, and zoning rules to liberalize the commodity market (deadline: June 2026).
• Corporate Governance: Amend the Companies Act 2017 to modernize corporate governance and align regulations with international best practices, supporting capital market development (deadline: June 2026).
• SEZ Reforms: Publish a concept note defining objectives, KPIs, and reform rationale for Special Economic Zones to improve efficiency and investment incentives (deadline: June 2026).
Compliance and Review Findings
• Pakistan met six of seven quantitative performance criteria (PCs) for end-June 2025, including targets for SBP net international reserves, tax returns, and government guarantees.
• Minor non-compliance occurred with BISP spending, missing the floor by PKR 463 million (0.0004% of GDP). A waiver has been requested.
• Indicative Targets (ITs) showed progress in tax collection, domestic debt management, and power sector arrears. However, some ITs on budgetary health, education spending, and provincial deficits were missed.
Challenges and Contingency Measures
• The FED on fertilizer and pesticides was delayed due to ongoing agricultural reforms and recent floods but will be implemented if revenue shortfalls occur.
• Emergency sugar imports caused temporary non-compliance on tax exemptions, but authorities committed to sugar sector deregulation.
• The Governance and Corruption Diagnostic (GCD) report publication was delayed but completed as a prior action; the associated action plan is now scheduled for December 2025.
• SOE law amendments are expected by August 2026.
IMF Statement
Pakistani authorities emphasized ongoing reforms, including carbon levies, electric vehicle subsidies, and SOE restructuring, to ensure compliance with the IMF program. The report acknowledged progress while setting new benchmarks to strengthen fiscal discipline, governance, and market reforms.