WB grants extension for $400m Pakistan tax reform project

To date, the PRR project has disbursed approximately $291.31 million, about 74 percent of the total funding

The World Bank has granted the Pakistani government’s request to extend the Pakistan Raises Revenue (PRR) project. This decision allows for a one-year extension of the project’s completion date, now set for June 30, 2025, and includes a restructuring of the project’s components.

The extension aims to ensure adequate time for the completion of the Investment Project Financing (IPF) component, alongside adjustments in project development objectives and performance indicators.

Initially valued at $400 million, the PRR project is designed to support improvements in Pakistan’s tax system through both a results-based component and direct investment in infrastructure and technology.

The extension will enable revisions to project development objectives (PDO) indicators, including a shift in focus from the Tax-to-GDP ratio to an emphasis on the Federal Board of Revenue’s (FBR) total collections as a percentage of GDP.

This adjustment aims to better reflect the FBR’s efforts and the project’s impact on revenue collection.

Additionally, the restructuring addresses changes in measurement methodologies for certain performance indicators, such as customs clearance efficiency, due to the discontinuation of the World Bank’s Doing Business Report.

The project will now employ real-time data and case studies to assess progress in these areas.

To date, the PRR project has disbursed approximately $291.31 million, about 74% of the total funding, with notable progress in simplifying the tax system, improving taxpayer compliance, and enhancing institutional efficiency.

The World Bank’s approval of the extension and restructuring reflects confidence in the project’s ongoing success and its alignment with Pakistan’s economic reform objectives.




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