IMF-based review calls for reforms in fiscal oversight, taxation to restore confidence
LAHORE:
Pakistan needs urgent, coordinated and practical governance reforms to restore public trust, improve economic performance and strengthen state institutions, according to a detailed analytical review released by the Institute of Cost and Management Accountants of Pakistan (ICMA).
The report translates the International Monetary Fund’s (IMF) governance and corruption diagnostic into a structured and actionable reform roadmap covering fiscal management, taxation, public sector oversight, the judiciary, anti-corruption institutions and digital governance.
It warns that weaknesses in governance and corruption controls are directly hurting Pakistan’s economic growth, institutional credibility and investor confidence. The IMF diagnostic identified serious vulnerabilities across key state functions, including budget management, revenue administration, market regulation, financial sector oversight, anti-money laundering frameworks and the rule of law. Building on these findings, ICMA’s review outlines 32 priority reform areas designed to move Pakistan from diagnosis to implementation.
The report places strong emphasis on fiscal oversight as the foundation for improved governance. The report notes that repeated in-year budget changes without effective parliamentary scrutiny have undermined fiscal discipline. To address this, it proposes the creation of an independent Parliamentary Budget Office staffed with technical experts to objectively assess government spending, fiscal risks and budget amendments. According to the report, public hearings on major budget changes, external audits of fiscal oversight processes and real-time digital budget tracking would significantly improve transparency and accountability.
Revenue administration and tax reform form another central pillar. The report says Pakistan’s tax system remains complex, fragmented and unpredictable, discouraging compliance and limiting revenue growth. It recommends creating a dedicated Revenue Intelligence Unit within the Federal Board of Revenue (FBR) to use integrated data and risk-based analytics to better target tax evasion while easing pressure on compliant taxpayers. It also calls for transforming the existing Tax Policy Office into a fully empowered Tax Reform and Simplification Unit to rationalise tax laws, reduce exemptions and provide clear guidance to taxpayers.
State-owned enterprises (SOEs), long viewed as a major source of fiscal risk, receive special attention. The report highlights weak oversight, political interference and incomplete financial reporting as key causes of SOE losses. It proposes a specialised SOE Performance and Oversight Unit within the Ministry of Finance to continuously monitor financial and operational performance, identify risks early and strengthen governance through professional training of boards and management.
Public investment and procurement weaknesses are also flagged as major governance gaps. The report says frequent project delays, cost overruns and weak monitoring reduce the development impact of public spending. It recommends an independent Public Investment Monitoring Unit to conduct regular performance reviews of major projects and report transparently to parliament and the public. On procurement, it calls for a dedicated analytics team within the Public Procurement Regulatory Authority to track trends, detect irregularities and improve supplier performance evaluation.
On anti-corruption, the report underlines fragmented mandates and poor coordination among federal and provincial agencies. It proposes a National Anti-Corruption Coordination Council to enable intelligence sharing, joint investigations and harmonised case management, while preserving institutional independence. Capacity building in financial forensics, digital investigations and money laundering cases is described as essential to improve conviction rates and deterrence.
Judicial reform is presented as critical to restoring confidence in the rule of law and improving the business environment. The report highlights severe case backlogs and slow resolution of commercial disputes as major constraints. It recommends specialised benches, expanded digital case management, performance monitoring and wider use of alternative dispute resolution mechanisms to reduce pressure on courts and speed up justice delivery.
Digital governance runs across the reform agenda. The report urges full integration of NADRA’s digital identity system with federal and provincial services and the creation of a national data exchange layer to improve service delivery, reduce duplication and enable real-time monitoring. Strong ethics frameworks, whistleblower protection, transparent asset disclosure and improved public communication are also highlighted as necessary to rebuild public trust.
The report concludes that the effectiveness of the roadmap will depend on political commitment, institutional coordination and sustained capacity building. It calls for collaboration among the government, the IMF, regulators, civil society and professionals to turn recommendations into measurable outcomes, arguing that serious implementation could help Pakistan build resilient institutions, curb corruption and create conditions for sustainable economic growth.
