PTI Govt secure $518 Mn from World Bank for ‘tax reforms’

PTI Govt secure $518 Mn from World Bank for ‘tax reforms’

The PTI Government on Friday secured $518 Mn or Rs79 Bn in loans from the World Bank (WB) for enhancing tax revenues.

The World Bank has approved a package of $518 million for two projects in support of Pakistan’s efforts to raise revenue and reduce compliance cost with a goal of providing better services to the people.


  • WB approved $400 million loan for tax reforms in Federal of Revenue.
  • Another $118 million for KPK Revenue Mobilization and Public Resource Management Project.

Key Objective of FBR’s $400 Mn Loan: 

There are two key objectives tagged with the FBR’s $400 Mn loan

  • Increasing tax to Gross Domestic Product GDP ratio from 13% to 17%
  • Enhancing the income tax return filers from 1.2Mn to 3.5Mn by 2024

The WB has given the $518 million loan at concessionary rates –money that could have been used more productively by creating an asset.

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

Improvement in four Broader Areas:

The loan has been planned for bringing improvements in four broader areas. The project information document of $400 million puts these areas as having a:

  • Simple and coherent tax system
  • Control of taxpayer obligations
  • Compliance facilitation
  • Institutional development

The WB document claims that Pakistan needs to broaden the tax base instead of burdening the existing taxpayers.

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.


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