TheWorld
Bankhas agreed aloan
agreement of $518 milliontoPakistanfor reforms to
enhancetax
revenues and reduce compliance cost to provide better services to the
public.
The bank approved$400 million loan for the Federal
Board of Revenue (FBR)to increase its tax to gross
domestic product ratio from13%
to 17%and enhance the number of income tax return filers,
among other reforms.
The other$118 millionwill go torevenue mobilization and public
resourcemanagement project of the country’s northwest
Khyber Pakhtunkhwa province to increase its capacity for revenue collection and
the management of the province’s resources.
Aim
of the agreement:
The project aimsto simplify the tax regimeandstrengthen the taxandcustoms administration.It
will also support the FBR with technology and digital infrastructure and
technical skills.
This will enable more effective use of taxpayer
information and more targeted compliance as there are only 18 lakh people file
income tax returns.
World
Bank’s Report:
World Bank said that Pakistan’s revenue
performance has improved significantly to12.9%
in fiscal year 2017-2018against9.5% of GDP in fiscal year 2011-2012owing
to tax policy measures.
It said that this isstill lowerthan
the level needed by developing countries, ofat least 15% of GDP,to
fund basic government functions and provide services to people.
