The International Monetary Fund (IMF) has slapped 11 new conditions on Pakistan for the release of the next tranche of its bailout programme.
It also warned that tensions with India could heighten risks to the scheme's fiscal, external, and reform goals.
A new condition has been imposed on the provinces where the four federating units will implement the new Agriculture Income Tax laws through a comprehensive plan, including the establishment of an operational platform for processing returns, taxpayer identification and registration, a communication campaign, and a compliance improvement plan.
The deadline for the provinces is June this year.
The new conditions imposed on Pakistan include the parliamentary approval of a new Rs 17.6 trillion budget, an increase in the debt servicing surcharge on electricity bills and lifting restrictions on import of more than three-year-old used cars.
IMF also said that "rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme".
The report further stated that tensions between Pakistan and India have risen significantly over the past two weeks, but so far, the market reaction has been modest, with the stock market retaining most of its recent gains and spreads widening moderately.
The IMF report has shown the defence budget for the next fiscal year at Rs 2.414 trillion, which is higher by Rs 252 billion or 12%.
Compared to the IMF's projection, the government has indicated allocating over Rs 2.5 trillion or an 18% higher budget, after confrontation with India early this month. It has imposed the new condition of securing "parliamentary approval of the fiscal year 2026 budget in line with the IMF staff agreement to meet programme targets by end-June 2025".
The IMF report has shown the total size of the federal budget at Rs 17.6 trillion, including Rs 1.07 trillion for development spending.
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