LAHORE, July 31: The International Finance Corporation, a member of the World Bank Group, has signed an agreement to advise the Punjab government about reforming the province’s sales tax system.
The IFC will support the government as it streamlines sales tax regulations, improves collection procedures, and makes it easier for small and medium business to comply with tax regulations, said a release issued here on Wednesday.
The IFC and the Punjab government held a signing ceremony last week chaired by Chief Minister Shahbaz Sharif and attended by Finance Secretary Jehanzeb Khan.
The initiative would help boost government revenues while providing business with transparent and easy-to-understand tax guidelines. “The project comes as newly-elected governments in Islamabad and Lahore launch wide-ranging reform programmes to help reinvigorate growth and make the Punjab a leading investment destination.
“The project is part of an IFC effort to help governments across the Middle East and North Africa modernise their regulations to ease the regulatory burden on firms and encourage economic development.
“It is vital for regional governments to have a broad tax base; without it, they will struggle to achieve their policy objectives, including delivering the infrastructure and social services needed to support growth,” said Magdi M. Amin, IFC’s manager for Investment Climate in the Middle East and North Africa.
“The key to broadening that tax base is implementing reforms that are simple for businesses to follow, which this project is designed to do,” he said.
The initiative is part of IFC’s strategy in Pakistan to stoke economic development by supporting regulatory reforms and encouraging the growth of the private sector. Through a combination of investments and advisory services, IFC is helping to bolster power supplies, increase agricultural productivity, boost regional trade, and support smaller businesses, among a host of other initiatives.