The World Bank has rated the overall implementation progress of the ‘Pakistan Raises Revenue’ project worth $400 million moderately satisfactory, observing that some key procurements are underway.
The Bank’s official documents revealed that $277.61 million i.e. 71 percent of the financing has been disbursed so far while the undisbursed amount stands at $114.39 million.
The Bank stated that overall satisfactory progress is noted towards the achievement of project development objectives and implementation of the results-based component of the project. There is improved performance in several Disbursement Linked Indicators (DLIs).
The withholding tax lines have been reduced from 58 in FY19 to 33 in FY22 (DLI 1). The detailed tax expenditure and evidence-based revenue forecast reports were published in FY23, while a tax gap analysis report was published last year (DLI 2). Under DLI 3, all four provinces have signed MOUs for data sharing with the Federal Board of Revenue (FBR), as well as MOUs for input adjustments in sales tax, and have adopted FBR’s valuation tables for immovable properties.
FBR has added around 616,000 new taxpayers, identified through automated data sharing, ICT-based business Intelligence tools, surveys, and other enforcement methods.
Cumulatively, 1.079 million taxpayers were added during the past four years (DLI 5). In FY23, FBR completed 53 field audits of large taxpayers for cases selected by the risk-based selection tool and monitored by the Compliance Unit through the Audit Management Information System (DLI 6). On DLI 7 the single returns portal is planned to be piloted with the Punjab Revenue Authority (PRA) in 2023. The functionality of the system has been tested with the telecom sector and PRA.
Customs processing has improved with the reduction in the frequency of physical inspections at the border – from a baseline of 60 percent of goods declared through the red and yellow channels in FY19 to 33.42 percent in FY23 (DLI 8). Simplification of FBR’s core business processes has surpassed its target.
FBR has completed the review, redesign, or simplification and automation of 5 additional business processes of tax administration in FY23 (cumulatively, 17 against the target of 15 business processes. DLI 9).
The FBR has continued to track the Key Performance Indicators and published the bi-annual results report for FY23 on its website. The annual report for FY23 is being finalized (DLI 10). The implementation progress of component 2 is moderately satisfactory. Some key procurements are underway, including the preparation of the site for the data center and equipment for the Automated Entry Exit Systems (AEES) for airports; launching the procurement process for AEES equipment for airports; while the procurement process for the equipment for seaports will be launched soon.
The hiring of consultants is also under process for the Central Risk Management System and Post Clearance Audit through comprehensive Business Process Mapping and Reengineering of core business processes. The specifications for other major procurements related to the upgradation of data centers or data warehouses are being designed, which will inform the procurement process for the same.
