The International Monetary Fund (IMF) has reportedly agreed to withdraw a proposed increase in sales tax on stationery items, following discussions with Pakistani authorities and intervention from Prime Minister Shehbaz Sharif, according to sources.

Sources said the IMF has accepted the government’s request to drop the plan that would have raised sales tax on stationery products from 10 percent to 18 percent in the upcoming federal budget 2026–27.

The decision is expected to provide relief to students, schools, and households, as stationery items such as notebooks, pens, pencils, erasers, and geometry boxes are essential educational supplies widely purchased at the start of each academic year. The proposed tax hike had raised concerns over added pressure on already stretched education-related expenses amid high inflation.

Pakistan’s stationery market is largely dependent on imports, with a significant share of finished goods and raw materials sourced from China and other regional suppliers. The sector serves millions of school and university students as well as offices and public institutions, making it a high-volume consumer market.

Sources added that other tax measures under discussion for the upcoming budget remain subject to ongoing negotiations.