Business

World Bank approves $518 mln loan to enhance the tax revenues in Pakistan

The World Bank has approved a package of $518 million loan for Pakistan to enhance the tax revenues of the country.
The lending institution has approved the loan for tax reforms in Pakistan to raise tax revenues, the Country Office of the World Bank said in a statement on Friday.
The bank has approved loan package of $518 million for two projects to raise revenue and reduce compliance cost with a goal of providing better services to the people.
A $400 million of the loan has been approved for tax reforms in Federal Board of Revenue and another $118 million approved for Khyber-Pakhtunkhwa Revenue Mobilisation and Public Resource Management Project.
The key objectives set for the FBR’s $400 million loan is to increase tax to Gross Domestic Product ratio from existing 13 per cent to 17 per cent and enhancing the income tax return filers from 1.2 million to 3.5 million by 2024.
Other objectives of the tax reforms loan include bringing customs reforms.
The Word Bank has given this loan to Pakistan at concessionary rates for using it more productively by creating assets.
It is to pertinent to mention here that an attempt was earlier made by the the bank to reform the FBR in the past 14 years-A $150 million worth of Tax Administration Reforms Project, which failed to yield the desired results.
A document of the lending institution said that Pakistan needs to broaden the tax base instead of burdening the existing taxpayers.