World Bank Questions $304 Million Project’s Delay in Punjab

The World Bank (WB) has expressed concern over the slow pace of the progress on simplification and automation of key business processes for tax administration and enhanced capacity for generating revenue from real estate in Punjab, official documents revealed.

The WB documents on the Punjab Resource Improvement and Digital Effectiveness (PRIDE) Program noted an overall allocation of US$ 304 million for the project which aims at increasing own source revenue and improving the reliability of resource allocation and access to digital services for people and firms in the province of Punjab.

The program focused on strengthened budget formulation and fiscal risk management; increased use of digital technology for delivery of selected public services and improved collection of own source revenue (OSR).

The report revealed that the progress on indicators related to simplification and automation of key business processes for tax administration, and enhanced capacity for generating revenue from real estate are moving slowly, mainly due to the initial delay in the approval of PC1 to activate the technical assistance (TA) funds for hiring consultants. The Terms of Reference (TORs) to hire a consultant to prepare a business process reengineering plan have recently been approved. This study will also complement the functional reviews of tax authorities, planned under the TA component of the Program.

The report said that expanding sales tax on services (STS) base and filing compliance is on track. During the past two years, the STS base has expanded by 34 percent (from 82,285 in June 2020 to 109,950 registered taxpayers in June 2022), and filing compliance has improved (from an average of 23,947 in FY20 to 66,199 in FY22). It is expected that PRA will achieve all future DLI targets.

There is a need to expand the scope further considering the potential achievement of the final target for this indicator and the Citizen Perception Survey completed by GoPb. Although the number of services offered digitally has increased from nine to 20, each service is being provided through stand-alone platforms, such as e-auction, Baldia online, and Police Station.

These include patient registration, death certificate, domicile certificate, police verification certificate, violence against women, consumer protection, etc. The government is now focusing on developing a single platform to avoid a fragmented landscape of systems. Key components of this government-wide uniform architecture include Digital Identification (ID), interoperability, and digital payment.

The Government has prepared the initial design of these components, which is being coordinated with federal agencies, such as the National Database and Registration Authority (NADRA) and the State Bank of Pakistan (SBP). The restructuring proposal includes enhancing the scope of DLI 4 by adding a new DLR to support the establishment of a single digital platform, the WB report added.