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ISLAMABAD:
Prime Minister Shehbaz Sharif on Wednesday launched economic governance reforms to address vulnerabilities identified in the International Monetary Fund’s (IMF) report on governance and corruption, while taking ownership of a 142-point agenda for institution building and the rule of law.
The plan envisages conducting a national risk assessment on corruption, making rule-based appointments in key institutions including the National Accountability Bureau (NAB) and improving its credibility in the eyes of the public.
While speaking at the launch ceremony, Shehbaz said that the recommendations of the international institutions have been incorporated into his reform plan, but basically the government’s homegrown agenda is to “shift from crisis management to institution building”.
According to a condition in the IMF rescue package of 7 billion USD, Pakistan was required to publish “government action plan based on the recommendations of the Governance Diagnostic Assessment” to address critical governance vulnerabilities by December 31.
After the ceremony at the Prime Minister’s House, the Treasury released the 240-page report on economic governance reforms, detailing all aspects that could help improve poor governance and address critical corruption-related vulnerabilities.
Earlier, the ministry had released the 186-page Governance and Corruption Diagnostic report to meet IMF conditions.
Shehbaz said that under his government plan there are 59 priority actions and 83 supplementary actions. This brings the total number of these required actions to 142 to be implemented over a period of the next three years.
The prime minister said the government’s focus would now shift from crisis management to institution building. He said the people of Pakistan have paid a very high price over the past two years and “we cannot go back to business as usual”.
While speaking on the occasion, Finance Minister Muhammad Aurangzeb said the governance plan is based on three core streams: growth-oriented fiscal policy and public investment management, improving market confidence and simplifying regulations and building confidence in legal processes.
The Treasury will act as the secretariat to implement the action plan, while the UK’s Foreign and Commonwealth Development Office (FCDO) will provide technical support.
The Ministry released a report stating that where appropriate, alignment (of the Plan) with the IMF’s Extended Fund Facility will be strengthened through the IMF’s participation in these dialogues for the implementation of the Plan.
Major actions
Pakistan has committed to the IMF to publish the SIFC annual report by June 2027. The draft annual report will be submitted in December 2026 and the final report is due in March 2027.
The purpose of the report is to increase transparency regarding strategic investments by producing and publishing the first annual report of the Special Investment Facilitation Council (SIFC), including information on all investments that it has facilitated, including concessions granted along with detailed justification for concessions, and the estimated value of concessions.
By June 2026, the government will also conduct national corruption risk assessment and within three months will form the national anti-corruption task force. The government will also identify the top 10 agencies with high corruption risks by June 2027. And in June 2028, it will publish annual reports from the identified 10 highest risk agencies and will report on demonstrated reduction of risks.
The IMF report had cited the NAB report which showed that the anti-graft watchdog recovered Rs5.3 trillion of the embezzled money in just the last two years.
According to the new action plan, the government will carry out a legislative review of the Anti-Money Laundering Act (AMLA) by June 2026 at the latest to remove ambiguities. It will also finalize and submit an amended Anti-Money Laundering Bill for consideration by Parliament. These changes will be announced by June 2027 at the latest.
Within a year and a half, Pakistan will also build the capacity of judges through the implementation of training plans regarding AMLA.
The IMF has also given a one-and-a-half-year timetable to strengthen the accountability and integrity of officials. It will implement a computerized system to generate risk-based cases for verification.
The verification will be carried out by FBR and other relevant agencies. Using the risk factor model, cases that receive red flags will be reviewed by a committee of the Establishment Division, FBR, FIA and NAB to decide whether the case should be formally investigated; and, if so, by which agency.
By June 2027, the government will notify SECP rules that should codify the entire process of appointment of chairman, commissioners and political board members of the SECP.
The government will ensure timely initiation of appointment processes, minimum three months before completion of tenure, and it will also prepare a public annual governance and transparency report approved by SECP’s policy board.
It will also review the appointment process for the NAB chairman by June 2027 and will enhance the public credibility of NAB as an anti-corruption agency, according to the published plan.
In six months, Pakistan will form a methodological working group that will be mandated to carry out a diagnostic to effectively resolve economic disputes, monitor judicial and court performance, to reduce dependency and monitor the implementation of recommendations. By June 2027, Pakistan will publish an annual performance report with recommendations on economic disputes.
In order to increase the efficiency, integrity and performance culture of the tax administration, the government will establish several business committees by June next year and subsequently prepare and implement plans over a period of two years to increase the capacity and integrity of the tax authorities.
The government will formulate a time-bound tax simplification strategy with draft tax policy provisions to: reduce rate plans, reduce special schemes, reduce excessive withholding tax, reduce advance taxes, rationalize tax exemptions and harmonize federal and provincial taxes. These measures will be designed with a view to revenue neutrality in the medium term.
The government will enforce a 10% cap on new PSDP projects and will prioritize high-impact PSDP projects by June 2027. Within a year and a half, it will prevent half-year cuts in development spending and will develop a mechanism to link constituency demands with resource allocations. However, unexpected revenue shortfalls will have to be adjusted in PSDP funding according to the plan.
New rules for public procurement 2025 will be drawn up in accordance with international best practice and will be processed for cabinet approval, which will explicitly not contain any preferential treatment for state-owned enterprises.
