ISLAMABAD: The World Bank group has launched a project to help simplify the administration of sales tax in Punjab.

The project will help the Punjab Revenue Authority (PRA) develop and implement a business-friendly tax system for services, removing the bottlenecks investors and businesses face when complying with tax regulations.

According to PRA Chairman Iftikhar Qutub, the provincial government’s partnership with the World Bank-affiliate International Finance Corporation (IFC) will help government establish several milestones on the path of good governance in Punjab.

IFC says that businesses in Punjab spend an average of 48 days per year to comply with tax regulations, adding considerably to compliance costs. The new system will reduce compliance time, encourage businesses to join the formal sector, and widen the tax base.

“Reforming tax regulations is an important part of efforts to create a more business-friendly environment,” says Andrei Mikhnev, IFC’s Practice Manager for Trade and Competitiveness in the Middle East and North Africa. “Transparent and efficient tax regulations should boost investor confidence and increase compliance rates,” he said.

The project will also help the PRA develop the legal and regulatory framework needed to govern the newly simplified processes.

It will also assist the authority in conducting an assessment of its training needs and capacity building programmes.

The project is part of a wider effort by the World Bank group to support Pakistan’s economic growth at the federal and provincial levels by creating a better climate for investments and private sector growth.

Published in Dawn, November 4th, 2014