This statement followed the IMF Executive Board’s approval of a 37-month Extended Fund Facility (EFF) for Pakistan, which included a $1 billion disbursement.

The Pakistani government had agreed to this deal—its 24th from the IMF since 1958—in July, in exchange for implementing unpopular reforms aimed at addressing the persistently low tax base.

Prime Minister Shehbaz Sharif remarked that this program should be considered the last of its kind.

The IMF highlighted the necessity of continuous program execution supported by capacity development and collaboration with partners to secure additional financing and restore market access.

It welcomed steps towards a fairer tax system and stressed the need for improved revenue generation through an expanded tax base and better tax administration.

The IMF also noted the critical need for Pakistan to move away from a state-led growth model, advocating for a more competitive business environment and the removal of trade barriers.

It emphasized the importance of vigilant monitoring and robust contingency planning to ensure the success of the program.

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In recent measures, PM Shehbaz approved significant tax enforcement initiatives, including banning banking transactions for those who do not file tax returns.

The IMF anticipates that a comprehensive reform plan will be implemented over the next few years, focusing on tax compliance and enhancing the overall economic framework.

Despite some progress, the IMF warned that Pakistan faces significant structural challenges, including a difficult business environment and inadequate investment in essential services. The board stressed that without concerted efforts in policy adjustment and reform, Pakistan risks falling further behind its peers.