ISLAMABAD, June 14 (Xinhua) -- The World Bank has granted 518 million U.S. dollars to Pakistan for reforms to enhance tax revenues and reduce compliance cost to provide better services to the public, local media reported Friday.
The bank approved 400 million U.S. dollars loan for the Federal Board of Revenue (FBR) to increase its tax to gross domestic product ratio from 13 percent to 17 percent and enhance the number of income tax return filers, among other reforms.
"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. This will enable more effective use of taxpayer information and more targeted compliance. The government has set improving tax revenue with low compliance costs as a high priority," a press release issued by the World Bank said on its website Thursday.
Commending Pakistan on its tax policy measures, the World Bank said that the country's revenue performance has improved significantly from 9.5 percent of GDP in fiscal year 2011-2012 to 12.9 percent in fiscal year 2017-2018 owing to tax policy measures.
"This is still lower than the level needed by developing countries, of at least 15 percent of GDP, to fund basic government functions and provide services to people."
The other 118 million U.S. dollars will go to revenue mobilization and public resource management project of the country's northwest Khyber Pakhtunkhwa province to increase its capacity for revenue collection and the management of the province's resources.