PTI Govt Adjusted $518 million from World Bank for ‘tax reforms’

ISLAMABAD: On Friday, the Tehreek-e-Insaf Government of Pakistan at Center, and Khyber-Pakhtunkhwa, in the name of tax revenue improvement, secured $518 or Rs79 billions of World Bank funds – a task to do without burdening the country with foreign loans.


 A bundle of $518 million was approved by the World Bank to promote two efforts aiming at Pakistan's ambitious revenue generating and cost-reduction projects to offer better facilities to its citizens, according to the World Bank Country Office on Friday.


The WB approved $400 million loans for tax reforms in Federal of Revenue and another $118 million for Khyber-Pakhtunkhwa Revenue Mobilisation and Public Resource Management Project.


The decisions by PTI to take loans to raise the tax base posed concerns about Imran's allegation that because of the past oppressive PML-N Government individuals are not subject to the tax net.


The WB provided $518 million of concessionary rates – cash that could have been more productive if an asset could have been created.

 It will be the second full-scale attempt by the WB to reform the FBR in the past 14 years. It’s earlier $150 million worth of Tax Administration Reforms Project badly failed to yield the desired results and the money went down the drain.


Out of $400 million, $320 million will be linked with the achievement of certain targets.

The WB document claims that Pakistan needs to broaden the tax base instead of burdening the existing taxpayers. However, the IMF’s practical steps are contrary to this advice. The IMF has asked Pakistan to make tax efforts equal to 1.7 per cent of GDP next year that forced the government to slap at least Rs516 billion additional taxes in budget 2019-20.


 “The ($400 million) project will target raising the tax-to-GDP

ratio to 17 per cent by the financial year 2023-2024 and widening

the tax net from the current 1.2 million to at least 3.5 million

active taxpayers”,


said The WB Task Team Leader of the Project Muhammad Waheed.


 “Creating fiscal space through revenue mobilisation is critical to

reducing the country’s budget deficit, enabling people of Pakistan

to benefit from better public investments and services,”

said World Bank Country Director for Pakistan Illango



Provincial government with $118 million Revenue Mobilization, will help to build its income collection and manage funds in Khyber-Pakhtunkhwa, according to the World Bank.


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