World Bank and Pakistan sign 3 loan agreements worth $918 million for development sectors
The World Bank and Pakistan on Tuesday signed three loan agreements worth a total of $918 million providing capital for development across various sectors as part of the government’s plan to steer the nation out of the economic crisis.
Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh witnessed the signing of the agreement between Country Director World Bank Patchamuthu Illangovan and Economic Affairs Division Secretary Noor Ahmed. The representatives of the Higher Education Commission (HEC) and Government of Khyber Pakhtunkhwa signed their respective project agreements.
The programme is aimed at “contributing to a sustainable increase in domestic revenue by broadening the tax base and facilitating compliance,” a press release from the Economic Affairs Division said.
‘Pakistan Raises Revenue Program’ — $400 million
The $400 million Pakistan Raises Revenue Project is targeted at raising revenue to contribute to a sustainable increase in domestic income by broadening the tax base and facilitating compliance.
It will support the Federal Board of Revenue’s (FBR) focus to create a sustainable increase in Pakistan’s domestic tax revenue. The project will assist in simplifying the tax regime and strengthening tax and customs administration. It will also support the FBR with technology and digital infrastructure and technical skills. The Government has set improving tax revenue with low compliance costs as a high priority.
“Revenue mobilization plays an essential role in Pakistan’s fiscal sustainability,” said Muhammad Waheed, Task Team Leader of the Project. “The project will target raising the tax-to-GDP ratio to 17 percent by financial year 2023-2024 and widening the tax net from the current 1.2 million to at least 3.5 million active taxpayers.”
‘Higher Education Development in Pakistan’ — $400 million
Another $400m agreement is a higher education development programme to “support research in strategic sectors of the economy, improve teaching and learning and strengthening governance in the higher education sector.”
The finances will be used towards nurturing academic excellence in strategic sectors, supporting decentralised higher education institutes for improved teaching and learning, equipping students and higher education institutions with modern technology, higher education management information system and data drive services and capacity building, project management and monitoring & evaluation.
‘Khyber Pakhtunkhwa Revenue Mobilisation and Resource Management Program’ — $118 million
The third programme, worth $118m, is reserved for revenue mobilisation and resource management project for the Khyber-Pakhtunkhwa (KP). The objective of the programme is to increase the collection of KP’s own revenue 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 press release said.
The program will help the government of Khyber Pakhtunkhwa to mobilise its own source revenue to and come up with the efficient and strategic use of the province’s financial resources.