The World Bank has announced an additional $70 million credit for the Pakistan Raises Revenue project, aiming to enhance domestic revenue collection and improve tax compliance in Pakistan. This new funding increases the total resources allocated to the project to $470 million.
The initiative builds on significant progress made by the Federal Board of Revenue (FBR) through the project. Achievements include expanding the tax base with 1.5 million new taxpayers, simplifying the tax system by reducing withholding tax lines, and upgrading IT infrastructure. The improvements also feature a single portal for sales tax payments and compliance, as well as business intelligence and data tools to enhance compliance efforts. Additionally, FBR has enhanced transparency in tax reporting, including disclosures on tax expenditures.
The increased financing will further bolster FBR's ability to boost revenues through strengthened IT systems and advanced data analytics tools designed to detect tax evasion. Enhancements in customs operations are also planned. These measures aim to increase transparency and accountability within FBR, fostering public trust in the tax system and encouraging greater voluntary compliance.
This project aligns with the World Bank Group’s Country Partnership Framework for Pakistan for 2026-2035. It directly contributes to its goal of raising Pakistan's tax-to-GDP ratio to 15 percent by 2035.