Birth Control Or Budget Control? IMF Offers No Protection To Pakistan From 18% 'Condom Tax'

The International Monetary Fund (IMF) has reportedly rejected a personal plea from the Pakistani government to slash the heavy taxation on birth control supplies. Prime Minister Shehbaz Sharif, seeking to make family planning more accessible to a cash-strapped population, had proposed removing the 18 per cent General Sales Tax (GST) currently levied on condoms and other contraceptives. However, the global lender remained unmoved, insisting that any deviation from the agreed-upon tax framework could jeopardise the country’s fragile economic recovery under its current seven-billion-dollar bailout programme.

The rejection comes at a time when Pakistan is grappling with an alarming population growth rate, which currently stands as one of the highest

in the region. The government had argued that the 18 per cent GST, imposed as part of a series of “mini-budgets” to satisfy IMF revenue targets, has effectively turned essential reproductive health supplies into luxury items for millions of low-income families. By making these products more expensive, the state fears a significant setback in its decade-long efforts to manage its demographics and reduce the strain on public infrastructure, education, and healthcare.

The IMF’s stance is rooted in its broader strategy of “fiscal consolidation”. For the lender, tax exemptions—even those for vital social goods—are viewed as “revenue leakages” that complicate the tax code and provide loopholes for further concessions. Under the terms of the Extended Fund Facility (EFF), the Sharif administration is committed to broadening the tax base and eliminating preferential treatments to bridge a massive fiscal deficit. From the IMF’s perspective, the integrity of the tax system and the achievement of revenue collection targets are paramount to ensuring that Pakistan can continue to service its mounting external debt.

This deadlock presents a significant political and social challenge for the Sharif administration. While the government is desperate to stay in the IMF’s good graces to avoid a sovereign default, it is also facing internal pressure from health advocates and economists who warn that the long-term costs of an unchecked population boom will far outweigh the short-term revenue gains from a contraceptive tax. With the plea now officially declined, contraceptives will remain subject to the standard 18 per cent GST, leaving the government to find alternative, likely more expensive, ways to subsidise family planning through direct provincial health budgets rather than tax relief.