Islamabad, July 17, 2025 – A political storm is brewing in the corridors of power as furious lawmakers launch scathing criticism over what they describe as a “sweet scandal” — massive tax breaks granted on sugar imports by the Federal Board of Revenue (FBR).
The controversy exploded during a fiery session of the National Assembly Standing Committee on Finance, where parliamentarians grilled top government officials for bypassing fiscal discipline. At the heart of the uproar lies the decision to waive taxes on the import of 500,000 metric tons of sugar, sparking accusations of fiscal compromise and backroom dealing.
Finance Secretary Imdadullah Bosal confirmed that delicate negotiations are underway with the IMF, specifically regarding the controversial sugar import exemptions. He admitted that one of the IMF’s structural benchmarks prohibits any tax exemptions or amnesty schemes—yet, paradoxically, the government is actively pursuing such concessions.
“We are in consultation with the IMF regarding tax exemption on sugar,” Bosal admitted, drawing sharp retorts from committee members who questioned the government’s credibility and intentions. The lawmakers demanded to know whether new taxes would be introduced to offset the revenue shortfall created by the sugar import relief.
The FBR’s sweeping exemptions include zero customs duty, a drastic reduction in sales tax from 18% to 0.25%, and a cut in withholding tax to just 0.25%—all on sugar imported by the Trading Corporation of Pakistan (TCP) or the private sector. The three percent minimum VAT has also been axed.
FBR Chairman Rashid Mahmood Langrial distanced his institution from the scandal, stating that the FBR merely acted upon a federal cabinet decision initiated by the Ministry of National Food Security and Research (MNFSR). “We issued the exemption notifications after cabinet approval,” Langrial clarified.
Langrial also revealed that currently, 54% cumulative taxes apply to sugar, including a 20% import duty—figures he deemed excessive. However, Committee Chairman Naveed Qamar slammed the move, stating, “There’s no sugar shortage in the country. We have ample stock. Why import at all?”
With opposition mounting and public skepticism growing, the government now faces a bitter backlash over a decision that critics say is anything but sweet.