ISLAMABAD: Pakistan and the World Bank (WB) on Tuesday signed three loan agreements under which the Washington-based lending agency would provide $918 million to help the Pakistani government expand the country’s tax base and improve education standards in strategic economic sectors.
The financing agreements were signed by Economic Affairs Secretary Noor Ahmed and World Bank’s Country Director Patchamuthu Illangovan here on Tuesday. Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh witnessed the signing ceremony.
Under the first agreement, the WB would provide $400m loan to help the Federal Board of Revenue (FBR) introduce key reforms in its administrative and technological areas. The loan programme had been under negotiations for almost 18 months and was approved by the WB’s board of directors last week.
Money will be used for expanding Pakistan’s tax base and improving education standards in strategic economic sectors
The objective of the programme is to contribute to a sustainable increase in domestic revenue by broadening the tax base and facilitating compliance.
The programme’s targeted results include increasing Pakistan’s tax to GDP ratio to 17pc, increasing the number of active taxpayers to 3.5m, reducing the compliance burden of paying taxes and improving the efficiency of customs controls.
Under the second agreement, the WB would extend $400m loan for strengthening the Higher Education Commission. The loan programme is aimed to support research excellence in strategic sectors of the economy, improve teaching and learning and strengthen governance in the higher education sector.
The project will finance nurturing academic excellence in strategic sectors, support decentralised higher education institutes for improved teaching and learning and equip students and higher education institutions with modern technology. The project will also support higher education management information system and data drive services and capacity building, project management and monitoring and evaluation.
The third loan worth $118m is meant for the Khyber Pakhtunkhwa’s Revenue Mobilisation and Resource Management Programme. The programme is expected to increase collection of KP’s own sources of revenues and improve the management of public resources. This objective is to be achieved through efficient revenue mobilisation, effective public resource management and capacity building to enhance e-government functionality.
The programme will help the Khyber Pakhtunkhwa government to mobilise its own sources of 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.
An official statement said that the WB’s country director had a customary meeting with Dr Hafeez Shaikh. 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 WB relationship with Pakistan and desired the programmes implementing agencies to put their best efforts to implement their respective programmes to help achieving the target objectives.
Published in Dawn, June 19th, 2019