ISLAMABAD: Despite Pakistan facing one of the highest population growth rates in the world, the International Monetary Fund (IMF) has refused to allow the immediate abolition of the 18% General Sales Tax (GST) on contraceptives, a move that has stalled government efforts to make birth control products affordable. As a result, condoms and other contraceptives will continue to be sold at higher prices.
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According to official sources, the IMF has flatly rejected the Federal Board of Revenue’s (FBR) proposal to withdraw GST on contraceptives, stating that such tax relief can only be considered in the next federal budget. This decision effectively blocks Prime Minister Shehbaz Sharif’s directive, issued in August 2025, to ensure wider access to family planning products.
The #IMF refuses to let Pakistan abolish tax on #contraceptives.
Despite having one of the highest population growth rates in the world and clear directives from Prime Minister Shehbaz Sharif, the IMF has refused to grant permission to abolish the 18 percent General Sales Tax…
— Mehtab Haider (@haider_mehtab) December 18, 2025
Sources said the prime minister had instructed the FBR to take up the issue with the IMF, but months of engagement failed to yield any breakthrough. During a recent meeting at the Prime Minister’s Office, it was disclosed that repeated attempts by the FBR to secure IMF approval were unsuccessful.
Officials revealed that the FBR formally approached the IMF’s headquarters in Washington through email correspondence and later in a virtual meeting. Pakistani authorities highlighted that the proposed tax relief would have a limited revenue impact, estimated between Rs400 million and Rs600 million.
However, the IMF’s Fiscal Affairs Department rejected the request, citing concerns over revenue shortfalls. The IMF maintained that no tax exemptions or reductions could be granted midway through the fiscal year, particularly when the FBR is struggling to meet its revised revenue target of Rs13.979 trillion for fiscal year 2025–26.
The IMF also opposed similar proposals to reduce GST on sanitary pads and baby diapers, arguing that these measures could involve substantial revenue losses and complicate tax enforcement. Officials added that the IMF expressed concerns over potential smuggling if selective tax relief were introduced.
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Pakistan’s population growth rate currently stands at 2.55%, with nearly six million people added annually, highlighting the growing disconnect between population policy objectives and fiscal constraints.