Islamabad: Despite one of the highest population growth rates in the world and clear directives from Prime Minister Shehbaz Sharif, the Federal Board of Revenue has been unable to abolish the 18 percent General Sales Tax on contraceptives, with condoms set to remain expensive after the International Monetary Fund flatly rejected the proposal.
According to a recent investigative report by senior economic journalist Mehtab Hauder, the IMF has outright turned down the FBR’s request to withdraw GST on contraceptives, effectively blocking the prime minister’s August 2025 instruction to make birth control products affordable and widely accessible across the country. As a result, there is no immediate possibility of slashing condom prices despite Pakistan’s surging population.
Officials said the prime minister had directed the FBR in August 2025 to take up the matter with the IMF, but months of engagement failed to yield any breakthrough. During a recent meeting at the Prime Minister’s Office, the issue resurfaced, and it was disclosed that the FBR had been unable to secure the IMF’s consent despite repeated attempts.
According to officials familiar with the process, the FBR formally approached the IMF’s headquarters in Washington, DC through email, seeking deliberations on abolishing GST on contraceptives. The FBR estimated the revenue impact of the proposed relief at Rs 400 to 600 million, but the IMF’s Fiscal Affairs Department showed little appetite for the proposal.
A virtual meeting was subsequently held in which Pakistani authorities conveyed the prime minister’s wish to abolish GST on condoms with immediate effect. The IMF side rejected the demand outright, arguing that no tax relief could be granted midway through the fiscal year, particularly when the FBR was already struggling to meet its revised revenue target of Rs 13,979 billion, lowered from Rs 14,130 billion, for fiscal year 2025–26.
IMF staff made it clear during the closed door discussion that any such tax relief could only be considered in the next budget for 2026–27.
The Pakistani side also proposed reducing GST on sanitary pads and baby diapers. However, officials said the IMF strongly opposed these measures as well, citing the large revenue stakes involved, particularly in baby diapers, where the tax base is estimated at nearly Rs 100 billion.
The IMF further argued that granting tax relief on contraceptives or diapers could complicate enforcement for the FBR by encouraging smuggling of these items, the sources added.
In August 2025, Prime Minister Shehbaz Sharif had ordered the immediate waiver of all taxes on contraceptive products to improve affordability and access nationwide, a move widely seen as critical to addressing Pakistan’s rapid population growth.
However, there is no officially notified spokesperson at the FBR, and the authority’s formal position on the IMF’s refusal could not be obtained despite repeated requests.
The News Correspondent on Health M. Waqar Bhatti had reported in August 2025 that senior FBR officials had already hinted at possible procedural roadblocks, noting that any tax waiver would require prior approval from the IMF before becoming part of Pakistan’s fiscal framework.
Pakistan’s population growth rate currently stands at 2.55 percent, among the highest globally, with nearly six million people added to the population every year, highlighting the widening gap between stated policy intent and fiscal decision making.
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