IMF Deal 2025 Pakistan May Impose New Taxes on Mobile, Cash Withdrawals & Solar Panels. Under its $7 billion IMF bailout agreement, Pakistan has promised to maintain strict fiscal discipline. To keep the programme on track, the government has informed the International Monetary Fund (IMF) that it is ready to introduce Rs. 200 billion in new taxes if revenue targets fall short or spending exceeds limits in the first half of the fiscal year.
These measures, targeting mobile users, cash withdrawals, and solar panels, will serve as a backup tax plan to ensure Pakistan meets IMF conditions and maintains economic stability.
IMF Deal Pakistan May Impose New Taxes
Pakistan’s assurance to the IMF reflects its effort to sustain global confidence and maintain the bailout programme amid rising fiscal pressure. The Federal Board of Revenue (FBR) has struggled to meet early-year tax goals, recording a Rs. 198 billion shortfall in the first quarter.
If the shortfall continues, the Rs. 200 billion contingency tax plan will be triggered automatically to prevent budget imbalance.
- Keeps the IMF programme running smoothly
- Ensures fiscal stability and investor confidence
- Avoids currency devaluation and payment crises
Why Pakistan Needs a Backup Tax Plan
Pakistan must maintain a primary budget surplus of 1.6% of GDP (Rs. 2.1 trillion) as per IMF conditions. However, the ongoing shortfall threatens this target.
Reasons for the Backup Plan:
- Weak tax collection performance
- Rising government spending
- Decline in revenue due to slow economic activity
- IMF’s strict monitoring of fiscal indicators
In the first three months of FY2025-26, the FBR collected Rs. 3.65 trillion, missing its target by Rs. 198 billion. The new plan ensures the government can act swiftly if the gap widens by December.
What Triggers the New Tax Measures
The Rs. 200 billion plan will only take effect if:
- The FBR misses its December revenue target, or
- The government overspends beyond IMF-agreed limits.
If these conditions occur, the Finance Ministry will automatically activate the contingency measures to protect the programme from derailing.
This approach helps the government prepare without immediately burdening taxpayers—but current data suggests the likelihood of activation is high.
Breakdown of Proposed Rs. 200 Billion Tax Measures
The proposed taxes mainly target telecom, banking, and consumer goods, sectors that can generate quick revenue.
| Proposed Measure | Current Rate | Proposed Rate | Expected Annual Revenue |
|---|---|---|---|
| Cash withdrawals (non-filers) | 0.8% | 1.5% | Rs. 30 billion |
| Landline calls | 10% | 12.5% | Rs. 20 billion |
| Mobile calls | 15% | 17.5% | Rs. 24 billion |
| Sales tax on solar panels | 10% | 18% | Rs. 25 billion |
| FED on confectioneries & biscuits | — | 16% | Rs. 70 billion |
The government may also consider a 1% increase in the standard sales tax (from 18% to 19%), which could generate another Rs. 225 billion, but that’s not the immediate focus.
Who Will Bear the Impact of New Taxes
If activated, these taxes will impact both consumers and businesses across multiple sectors.
Effects on the Public:
- Higher telecom costs for calls, recharges, and mobile data
- Increased deductions on bank withdrawals for non-filers
- Rising costs of solar panels, slowing clean energy adoption
- More expensive snacks due to excise duty on biscuits and sweets
Effects on Businesses:
- Telecom firms may see lower usage and profits
- Manufacturers could face reduced demand
- Renewable energy investors may delay projects
These are indirect taxes, meaning they are easier for the FBR to collect but tend to hit low-income households harder.
FBR Struggle to Meet Targets
As of late October 2025, the FBR had collected Rs. 3.65 trillion—short of the Rs. 4.11 trillion target.
Causes of the Shortfall:
- Weak enforcement of tax compliance
- Delay in implementing digital tracking systems
- Over-reliance on existing taxpayers instead of new ones
This persistent shortfall means the government has little choice but to introduce new revenue measures to meet IMF targets.
Sectoral Impact of the Proposed Measures
Each targeted sector faces unique challenges:
Telecom Sector
Rising FED on mobile calls may reduce call and data usage, forcing companies to increase rates. This could affect millions of users and slow telecom expansion.
Solar Energy Sector
A proposed sales tax hike from 10% to 18% may discourage solar investments. As solar systems become more expensive, the move could hurt Pakistan’s renewable energy goals.
Food and FMCG Sector
A new 16% FED on confectionery and biscuits increases production costs, which will likely be passed to consumers. This could raise prices for everyday snacks and goods.
Provincial Tax Delays and Policy Challenges
Provincial governments have also complicated the fiscal picture. Sindh and Punjab have once again delayed agriculture income tax collection, reducing potential revenue.
Because of this delay, the federal government depends heavily on indirect taxes, which affect the middle class and small businesses.
The IMF has urged Pakistan to expand its tax base and reform property, agriculture, and retail sectors to reduce reliance on such taxes.
Economic Consequences and Risks
While the Rs. 200 billion tax plan might satisfy IMF conditions, it poses several risks:
- Inflationary pressure due to higher consumer costs
- Reduced investment in telecom and renewable sectors
- Lower purchasing power for citizens
- Investor uncertainty from frequent tax changes
Economists warn that while these measures may stabilize short-term finances, they could slow economic growth and affect employment.
Possible Alternatives and Reforms
Experts suggest long-term structural reforms instead of quick fixes.
Recommended Reforms:
- Digitize tax collection for better transparency
- Use AI-based monitoring to track tax evasion
- Simplify tax laws to encourage compliance
- Expand taxes on real estate, retail, and agriculture
- Provide targeted subsidies to protect vulnerable citizens
Such reforms can increase tax revenue without burdening ordinary taxpayers.
Conclusion
Pakistan’s new IMF-backed tax plan underscores the government’s commitment to fiscal discipline, but also highlights its economic vulnerabilities.
If implemented, the Rs. 200 billion tax package—covering mobile usage, cash withdrawals, and solar panels—will help the country meet short-term revenue goals but may also lead to higher living costs and reduced investment in vital sectors.
