ISLAMABAD: The International Monetary Fund (IMF) observed that Pakistan failed to meet the structural benchmark (SB) relating to preparing a plan for phasing out incentives to Special Economic Zones (SEZs) and Export Processing Zones (EPZs).
The IMF in its second review of the ongoing Extended Fund Facility (EFF) and the first review of the Resilience and Sustainability Fund (RSF) report noted that although Pakistan missed the SB deadline of end-June 2025 for preparing the plan to phase out SEZs, the plan was subsequently implemented in October 2025.
The government pledged to build a comprehensive plan to fully phase out all current SEZs and EPZs incentives by 2035 (first phase by end June 2025), with the Fund urging the authorities to accelerate efforts to advance amendments to the SEZ Act. This would require preparing and publishing a concept note defining the rationale, scope, Key Performance Indicators, and expected outcomes of the legislative amendments, and the framework for the shift from profit- to cost-based incentives (second phase by end June 2026).
The report further noted that advancing the broader regulatory modernization agenda through the Asaan Karobar Bill will help streamline business regulations and licensing procedures, reducing entry costs for firms. Coordination with provincial governments would be essential to ensure that reforms have national coverage.
Furthermore, legislative amendments to the Companies Act will be submitted to parliament to strengthen corporate governance and transparency for both listed and unlisted companies by end June 2026. These reforms will help modernize the corporate business environment and better align the legal framework with international standards.
The IMF emphasised that the envisaged legislative amendments to the SEZ Act and the review of the Companies Act could significantly enhance the business climate and governance standards.
Copyright Business Recorder, 2025
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