$400 million tax reforms project reviewed

The World Bank and the Federal Board of Revenue (FBR ) on Thursday reviewed the implementation status of various measures agreed upon for broadening the tax base and taxpayers' facilitation under the Pakistan Raises Revenue Programme (PRRP) soft loan of $400 million.

The PRRP was initiated in 2019 and aimed at "contributing to a sustainable increase in domestic revenue by broadening the tax base and facilitating compliance". Several meetings have been held between top officials of the World Bank and FBR since then to review its progress.

Major targets included increasing the tax-to-GDP ratio to 17 per cent, the number of active taxpayers to 3.5 million, reducing the compliance burden of paying taxes and improving the efficiency of customs controls.

An official announcement said that a meeting was held between FBR Chairman

Asim Ahmad and World Bank Country Director Najy Benhassine to review the progress of the programme.

The FBR is implementing PRRP with financial assistance from the World Bank. Recently the World Bank concluded the mid-term review of the programme from October to November.

Based on initial findings, the World Bank has expressed overall satisfaction with the progress of the project due to major reforms in simplifying the tax regime, automating administration, expanding tax net, harmonizing GST etc.

An official of the FBR said that three major achievements of PRRP are harmonisation of the sales tax regime with provinces. "We have achieved this milestone of sales tax harmonisation", the official said.

The property valuation table of provinces will be brought to 85pc of the FBR valuation table. All the provinces have completed this process, the official said. Punjab and Balochistan revised their respective valuation tables in June, the official said.

The third big target was an increase in the filing of returns. This year it was expected that the number of filers will reach around 3.5 million. However, Pakistan is still far behind the agreed target to increase the tax-to-GDP ratio to 17pc as it was around 10-12pc in the past few years.

According to the official announcement, Mr Asim praised the efforts of the teams on both sides and added that the programme is going to further strengthen tax administration through upgrading and enhancing IT-based capacities of FBR.

The FBR and World Bank agreed to keep pursuing the reforms agenda under the project. Most of the participating companies are satisfied with their participation and the response received for their products during the China International Import Expo (CIIE) being held in Shanghai on November 5-10.

Six Pakistani companies based in China related to handicrafts, jewelry, sports goods, and garments and textile sectors are participating in the Expo.

Consul General in Shanghai Hussain Haider visited the booth of Pakistani companies at the expo and interacted with each of them. Pakistani companies exhibited jewelry, salt lamps, blankets, and marble and they got warm responses from customers and buyers.

Pakistan participated in the opening ceremony of the expo which is the largest and the most important import-themed expo in China and in the world.

Chinese President Xi Jinping delivered a speech via video during the opening ceremony.