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WB-funded tax reforms in Pakistan

May 08, 2013

THE government of Pakistan subscribed to the World Bank’s Tax Administration Reform Programme (TARP) to fundamentally reform the Federal Bureau of Revenue ‘for a more efficient and effective revenue administration system’.

The project began in December 2004 and was concluded in December 2011, costing $149 million. The amount included a World Bank loan worth $102.90 million which was to be borne by the taxpayers of Pakistan.

The Central Board of Revenue was believed to be an outmoded organisation which badly needed reforms from time to time.

The above project was the longest in duration and perhaps the costliest too to have ever been undertaken for CBR reforms.

Some time back I had read in a newspaper report that the World Bank had commented that there was risk to the achievement of key development objectives of TARP due to the performance of the FBR ‘not being up to expectations’.

The comment is simply bizarre as the reforms in question were actually meant to heighten the performance of the FBR and if that was not attainable, then there was no reform or simply the reforms had failed.

However, the WB is now proposing a follow-up reform programme.

Recently, I read another news report that the government was looking for having another reform, at a whopping $300 million, envisaged by the World Bank as a new TARP.

In fact, $3 million had already been loaned to Pakistan for preparation of the project. An analyst commented that WB experts, now working for the new reform programme, were unfamiliar with Pakistan’s tax issues, as in their latest presentations they were citing examples of the EU and the US, and added that they had no link whatsoever with the ground realities!

The CBR’s long history of reforms is akin to a fool who was expecting different results while doing the same thing over and over again.

The World Bank might be looking for a job for some seemingly out-of-work experts, otherwise if they were honest they would have by now declared our case unfeasible to any reform.

What we actually need, to start with, is systemic reforms of our politics of taxation and not providing new looks to the bricks and mortars housing tax officials -- what the WB has fruitlessly done all these years at the expense of our taxpayers’ money.