IMF Exposes Corruption in FBR

The International Monetary Fund (IMF) has submitted its Governance and Corruption Diagnostic Assessment report to the Finance Division, where it has called for immediate measures to curb corruption in the Federal Board of Revenue (FBR) and strengthen governance. The IMF’s recommendations in the report include: limiting tax exemptions across sectors and investments; reducing special regime relief, advance taxes and additional withholding taxes (with the FBR asked to submit a strategy for this); and separating tax policy formulation from FBR operations to improve policy clarity and implementation. The fund also urged changes to the legal framework to grant full autonomy to the Auditor General of Pakistan and demanded a ban on budget adjustments that create supplementary grants without parliamentary approval, while asking the Finance Ministry to further improve the budget process. The IMF has sought a progress report from the government’s economic team on implementation of the report’s targets by May 2026 and called for a published governance action plan based on the diagnostic’s recommendations. The assessment followed an IMF mission that held discussions with roughly 30 departments in April as part of the diagnostic exercise. The report is intended to inform structural reforms tied to Pakistan’s ongoing IMF engagement.