ISLAMABAD: The World Bank has approved an additional $70 million credit for the Pakistan Raises Revenue (PRR) project to boost Pakistan’s domestic revenue collection and improve tax compliance.
This additional financing brings the total amount of resources under the project to $470 million.
It builds upon important gains achieved by the Federal Board of Revenue (FBR) through the project, including a broadened tax base with 1.5 million new taxpayers, a simpler and more progressive tax system with fewer withholding tax lines, upgraded information technology (IT) infrastructure including a single portal for sales tax payments and compliance, and establishment of business intelligence and data tools to improve compliance.
World Bank defers additional $70m IDA credit to Pakistan Raises Revenue
The FBR has also improved tax transparency, including reporting on tax expenditures.
Tax revenues have increased, making more resources available to increase social sector budgets, particularly for social safety nets.
The additional financing will further support FBR’s capacity to increase revenues, including via strengthened IT systems, advanced data analytics tools to identify tax evasion, and enhancing customs operations.
These enhancements will increase transparency and accountability in the FBR, building public trust in the tax system and encouraging greater voluntary compliance.
The project is aligned with the WB Group’s Country Partnership Framework for Pakistan for 2026-2035, contributing directly to its target of raising the tax-to-GDP ratio to 15 percent by 2035.
Copyright Business Recorder, 2025
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