ISLAMABAD   -   Pakistan and World Bank on Tuesday signed loan agreements worth of $918 million that would help the country to raise revenue and reduce compliance cost with a goal of providing better services to the people. Secretary, Economic Affairs Division, Noor Ahmed signed the financing agreements on behalf of government of Pakistan while the representatives of Higher Education Commission (HEC) and Government of Khyber Pakhtunkhwa signed their respective project agreements. Country Director, World Bank, Patchamuthu Illangovan signed the agreements on behalf of the World Bank. Adviser to the Prime Minister on Finance, Revenue and Economic Affairs, Dr. Abdul Hafeez Shaikh, witnessed the signing ceremony of following three loan agreements worth US$ 918.0 million with the World Bank held, here.

The $400 million Pakistan Raises Revenue Project will support the Federal Board of Revenue’s (FBR) focus to create a sustainable increase in Pakistan’s domestic tax revenue. The project will assist in simplifying the tax regime and strengthening tax and customs 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. The government has set improving tax revenue with low compliance costs as a high priority. The Program’s targeted results include: (i) increasing Pakistan’s tax to GDP ratio to 17 percent by financial year 2023-2024; (ii) increasing the number of active taxpayers to 3.5 million from current 1.2 million; (iii) reducing the compliance burden of paying taxes; and (iv)improving the efficiency of customs controls. Pakistan’s revenue performance has improved significantly from tax policy measures in recent years, rising from 9.5 percent of GDP in financial year 2011-2012 to 12.9 percent in financial year 2017-2018. This is still lower than the level needed by developing countries, of at least 15 percent of GDP, to fund basic government functions and provide services to people.

Higher Education Development in Pakistan worth US$400.0 million: The development objective of the program is to support research excellence in strategic sectors of the economy, improve teaching and learning and strengthening governance in the higher education sector. The project will finance the following components: (i) nurturing academic excellence in strategic sectors; (ii) supporting decentralized higher education institutes for improved teaching and learning; (iii) equipping students and higher education institutions with modern technology; (iv) higher education management information system and data drive services; and (v) capacity building, project management and monitoring & evaluation.

Khyber Pakhtunkhwa Revenue Mobilization and Resource Management Program worth US$118.0 million: The development objective of the program is to increase collection of KP’s own-source revenues and improve the management of public resources.  This objective is to be achieved through (a) efficient revenue mobilization and (b) effective public resource management and (c) capacity building to enhance e-government functionality.

The Program will help the government of Khyber Pakhtunkhwa to mobilize own source revenue to address the constraint of limited fiscal space for investment and public service provision and efficient and strategic use of the province’s financial resources.

Later, the World Bank’s Country Director held a meeting with the Adviser to Prime Minister on Finance. The Adviser thanked the World Bank Team for extending their continuous support to the Government of Pakistan in its efforts to achieve the sustainable economic development of the country. He appreciated the World Bank relationship with Pakistan and desired the programs implementing agencies to put their best efforts to implement their respective programs to help achieving the programs objectives.