The Country Office of World Bank has announced a loan package of 518 million USD for the purpose of tax reforms to the federal government along with the provincial government of Khyber Pakhtunkhwa.
400 million USD would be allocated to the federal, while 118 million USD would be handed over to the provincial government for the subject purpose. The granted loan is approved at concessionary rates as the World Banks wishes to support the country to form appropriate tax structures.
With the input from WB, Federal Board of Revenue (FBR) aims to utilize the opportunity by targeting two major areas. The plan is to increase the tax to GDP ratio from 13% to 17% and expand the income tax net from 1.2 million filers to 3.5 million filers by 2024. While the provincial government would use the funds for the Revenue Mobilization and Public Resource Management Project.
FBR is also aspirant to make a user-friendly tax system with simple and easy procedures. With this approach, the bureau would offer better facilities to the taxpayers and would focus on institutional development.
The recent grant by the World Bank is the second endeavor in the last 14 years, to support the bureau to implement the reforms and escalate the developments. Unfortunately, the last initiative of 150 million USD turned out to be a major flop, as the desired results were not obtained. However, this time the Bank has tried to play safe by referring the grant of funds to the accomplishment. The bank has announced that out of 400 million USD, 320 million USD are subject to the achievement of the desired goals.