New Delhi, Dec 26 (NationPress) Pakistan has developed a persistent reliance on financial support from the International Monetary Fund (IMF), continuously cycling through various fiscal challenges over the years. It is quite ironic that the nation secures these loans despite Islamabad's consistent failure to comply with the IMF conditions aimed at economic revival.

Pakistan is poised to receive its 25th loan from the IMF with the latest $7 billion Extended Fund Facility (EFF), spanning 37 months, along with an additional $1.4 billion earmarked for the Resilience and Sustainability Fund (RSF). Following the Staff-Level Agreement established in October, Pakistan is set to receive $1 billion via the EFF and $200 million through the RSF, raising the total disbursement under these two frameworks to approximately $3.3 billion.

“While this financial influx provides temporary relief to a vulnerable market, it highlights the persistent dependence on external bailouts. Each program aims to stabilize the economy through macroeconomic discipline, yet Pakistan continues to fail in implementing the structural reforms necessary for long-term resilience,” noted an article in the Asian Lite newspaper.

The IMF is not tasked with micromanaging domestic policies but rather setting fiscal targets, minimizing deficits, boosting revenue, and rationalizing subsidies. Unfortunately, consecutive administrations in Pakistan have favored politically convenient yet socially detrimental measures, placing a heavier burden on the salaried class and consumers while protecting powerful interest groups such as agriculture, real estate, and retail from taxes. Alarmingly, only about 2% of the population contributes to income tax payments, underscoring the inequitable nature of the system, as highlighted by the article.

An IMF report released in November 2025 pointed out enduring corruption issues within Pakistan and called for an urgent initiation of a 15-point reform agenda to enhance transparency, fairness, and integrity.

The IMF’s Governance and Corruption Diagnostic Assessment (GCDA) revealed that Pakistan continues to grapple with budget credibility. Projects that receive approval often fail to be funded throughout their lifecycles, leading to delays and cost overruns. The effectiveness of parliamentary oversight is further compromised by significant discrepancies between approved budgets and actual expenditures.

In 2024–25, the National Assembly sanctioned Rs 9.4 trillion in expenditure overruns, marking five times the amount of the previous year. Development funds directly controlled by legislators distort capital investments and complicate oversight, creating opportunities for the misuse of public authority for personal gain.

While the IMF advocates for fiscal discipline, the more profound issue lies not in the conditions set but in the political reluctance of Pakistan’s ruling elite to implement reforms that would diminish their own privileges. Excessive spending by state institutions remains unchecked, subsidies are misallocated, and elite privileges endure even as pensioners face reductions and low-income consumers are burdened with fixed gas charges, as reported by Asian Lite.

The energy sector is a prime example of this inequality. Instead of implementing usage-based billing, the government has imposed fixed charges that disproportionately affect low-income families. While the IMF advocates for cost recovery, equitable implementation through progressive tariffs and lifeline slabs is entirely within Pakistan’s jurisdiction. Likewise, tax evasion by influential sectors remains unaddressed, leaving the salaried class and consumers of petroleum products to bear the majority of the burden, as the report added.

The IMF has consistently urged for data-driven safeguards, due diligence, and anti-corruption guidelines; however, the execution has been lackluster. The Financial Action Task Force (FATF) based in Paris has also pinpointed vulnerabilities and issued recommendations, yet progress has been sluggish.

The challenge lies not in a lack of diagnosis but rather in a deficiency of political will. Successive governments have avoided broadening the tax base, opting instead to rely on compliant taxpayers with easily traceable incomes. Agriculture, real estate, and retail—profitable sectors—remain predominantly untaxed. In the meantime, the salaried class pays a disproportionate amount, and consumers shoulder the burden of indirect taxes on fuel and utilities, as the report concluded.