“World Bank Approves Extension and Restructuring of Pakistan’s $400M Tax Reform Project”

The World Bank has approved a one-year extension, until June 30, 2025, for Pakistan’s $400 million Pakistan Raises Revenue (PRR) project. This move includes a restructuring of project components to ensure the successful completion of its Investment Project Financing (IPF) component. The extension also facilitates revisions in project development objectives and performance indicators, shifting focus from the Tax-to-GDP ratio to the Federal Board of Revenue’s (FBR) total collections as a percentage of GDP. This reflects an emphasis on the FBR’s revenue collection efforts.

The restructuring also introduces new methodologies for measuring performance indicators like customs clearance efficiency, utilizing real-time data and case studies. So far, the project has disbursed about $291.31 million, achieving significant improvements in Pakistan’s tax system, taxpayer compliance, and institutional efficiency. The World Bank’s decision underscores its confidence in the project’s progress and its contribution to Pakistan’s economic reform goals.