IMF Rejects Pakistan’s Request to Cut Taxes on Condoms, Keeping Prices High

By SADAB KHAN

**By America News World Staff**
**December 21, 2025**

In a surprising move that has left many people talking, the International Monetary Fund (IMF) has turned down a request from Pakistan’s government to lower taxes on condoms and other birth control items. This decision means that these products will stay expensive for ordinary people in Pakistan, even as the country faces one of the fastest-growing populations in the world.

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Pakistan PM Shehbaz Sharif

Pakistan’s Prime Minister Shehbaz Sharif wanted to make family planning easier and cheaper. Earlier this year, in August 2025, he told officials to ask the IMF for permission to remove the 18 percent General Sales Tax (GST) on contraceptives like condoms. The government also asked for tax cuts on sanitary pads and baby diapers.

Pakistan’s Federal Board of Revenue (FBR) contacted the IMF in Washington by email. They said removing the tax on condoms alone would cost the government between 400 million and 600 million Pakistani rupees in lost revenue. A virtual meeting followed, where Pakistani officials explained the prime minister’s wish for immediate relief.

But the IMF said no. Officials explained that tax changes like this cannot happen in the middle of the financial year. Pakistan is already finding it hard to collect enough taxes to meet its targets. The IMF added that any tax cuts could only be talked about when planning the next budget, for the year 2026-27.

The IMF also worried that lower taxes might make it easier for smuggling and harder to enforce rules. They rejected similar requests for sanitary pads and diapers.

This rejection has embarrassed the Pakistani government. Many see it as a sign of how much control the IMF has over Pakistan’s economy. Pakistan is in a $7 billion bailout program from the IMF, which started in 2024. This loan helps the country pay its bills and avoid defaulting on debts. But in return, Pakistan must follow strict rules on spending, taxes, and reforms.

The bailout has many conditions – over 60 in the last 18 months, including new ones added recently to fight corruption and improve governance. Pakistan has received some money already, like $1 billion in May 2025 after a review. But the IMF keeps a close watch to make sure targets are met.

Why did Pakistan ask for this tax cut? The country has serious problems with population growth. Pakistan’s population is now over 255 million people in 2025, making it the fifth-largest in the world. Experts say the growth rate is about 2.55 percent per year. That means almost six million new people are added every year.

This fast growth puts huge pressure on schools, hospitals, jobs, and food supplies. Many experts say better access to birth control could help slow it down. But with high inflation and poverty, expensive contraceptives make family planning hard for low-income families.

The 18 percent GST was added in past “mini-budgets” to raise money and satisfy IMF demands for more revenue. Now, it turns basic health items into something many cannot afford. Health groups and economists warn that without cheaper options, population issues will get worse, hurting the economy in the long run.

Pakistan’s economy is slowly getting better under the IMF program. Inflation has dropped to very low levels, and the central bank has cut interest rates. Foreign reserves are stronger, and growth is picking up. But challenges remain, like high debt, energy problems, and political issues.

The government says it will keep talking to the IMF about tax relief in the next budget. For now, though, condoms and other contraceptives will keep their full tax. This leaves many Pakistanis facing higher costs for essential items.

This story shows the tough choices countries make when they need international help. Pakistan relies on IMF loans to stay stable, but the conditions can block popular policies. As the world watches, questions remain: Will Pakistan find ways to control its population growth? And can it break the cycle of needing more bailouts?

Experts say real change needs broader reforms, like better education for girls, more jobs, and stronger health programs. Without that, short-term fixes won’t solve long-term problems.

This decision has sparked debates online and in media, with some calling it embarrassing and others saying fiscal discipline is necessary. Whatever the view, it highlights the balance between immediate needs and economic rules.

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