Pakistan’s Top Companies Urge IMF for Policy Certainty and Export Incentives

Pakistan’s largest conglomerates pressed the International Monetary Fund to ensure predictable, long-term economic policies during talks with a visiting mission, as the lender cautioned against pursuing rapid growth after recent stabilization gains.

Executives from about 18 major corporations, both foreign and domestic, met IMF mission chief Iva Petrova on the second day of the Fund’s two-week review visit, according to participants.

The discussion, hosted by the Overseas Investors Chamber of Commerce and Industry (OICCI), centered on taxation, energy costs and the need to revive exports, which have declined more than 7% in the first seven months of the current fiscal year.

Business leaders urged the IMF to support time-bound tax and other incentives to boost overseas sales and investment, arguing that high corporate taxes, levies on the salaried class, and the so-called super tax are weighing on profitability and competitiveness. Some participants also called for faster privatization of power distribution companies to curb inefficiencies and reduce energy costs.

Petrova emphasized the need for phased economic growth to avoid a return to boom-and-bust cycles that have historically destabilized Pakistan’s economy, participants said. The IMF broadly expressed satisfaction with progress under the program, though concerns remain around taxation and the energy sector.

The mission’s visit comes amid mounting social pressures. A recent official report showed poverty at an 11-year high, unemployment at a 21-year high and income inequality at a 27-year peak. The government has attributed part of the strain to tough stabilization measures under the IMF-backed reform program.

Corporate representatives complained that policy uncertainty and a heavy tax burden are undermining confidence. One conglomerate told the delegation that various levies consume nearly 90% of its profits, while others flagged barriers to exports and the competitive disadvantage faced by the documented sector due to widespread tax evasion.

According to participants, Petrova acknowledged that broadening the tax base would take time and indicated the IMF is reviewing the recently introduced captive power policy, with potential adjustments under consideration.

OICCI President Yousaf Hussain acknowledged progress under the ongoing reform programme, citing improved fiscal consolidation, a stronger primary balance, stabilisation of the external account and rebuilding foreign exchange reserves. Inflation is moderating and the financial sector remains resilient, he said, adding that recent credit rating upgrades reflect improved fiscal discipline and renewed international credibility.

However, Hussain stressed that the next phase of reforms must focus on growth.

“The priority now is to transition from stabilisation to a phased yet sustained export-led growth path,” he said, calling for a centrally coordinated, technocrat-supported medium-term reform programme under a comprehensive National Economic Plan. Such a framework, he said, should align fiscal, trade, industrial, energy and human capital policies, backed by clear milestones and stronger coordination between federal and provincial governments.

Secretary General M. Abdul Aleem called for greater policy coherence, predictability and regulatory reforms to unlock Pakistan’s geo-economic potential. He advocated a rationalised tax and tariff regime, avoidance of retrospective taxation, timely refund payments and simplified compliance procedures to restore investor confidence.