Tax Administration Reform Project

[Lahore_Real_Estate]

World Bank extends deadline to Dec 31

Saturday, March 27, 2010
By our correspondent

ISLAMABAD: The World Bank has granted preliminary extension for the completion of the Tax Administration Reforms Project upto December 31, 2010 from the earlier deadline of December 31, 2009 and a three-month extension till March this year, official sources said.

“The World Bank granted approval before the report of its Inspection Panel, which is in Pakistan these days to ascertain whether the Bank’s funded $77 million project was moving in desired direction or not,” a senior FBR official told The News.

The tax authorities in the last five years have used the TARP project funds to purchase 37 vehicles but the allocated amount meant for developing software and information technology largely remained un-utilized, official sources revealed.

“We don’t know about the outcomes of the Inspection Panel at this stage but the WB’s top management has given written approval for extension,” he confirmed while talking to The News the other day. A World Bank official based in Islamabad also confirmed that they have granted extension for TARP up to Dec 31.

A World Bank mission led by one of its tax experts is visiting Pakistan from March 22 to 29 in order to ascertain whether the reform process is on track or not and what kind of steps are required to move ahead in the desired direction.

Official documents available with The News disclosed that the WB cut down $49.2 million from its overall cost for TARP out of which $24.8m were slashed from cheaper and soft lending in shape of IDA while $24.4m was reduced from commercial lending in shape of IBRD.

The revised downward cost will be tabled before the Bank’s board of directors after the final report of the Inspection Panel. The UK based Department for International Development (DFID) will also be taken into confidence as it had extended $23m in shape of grants.

Out of total revised cost of $73.783 million for TARP, Pakistan’s tax authorities will utilize $7.265 million for technical assistance (TA), developing of ICT-Software $3.826 million, ICT-Hardware $19.886 million,

infrastructure development $31.036 million, vehicles $2.113 million, training $6.365 million and program management $3.289 million. Earlier, there were estimates to spend $149 million on reform project in the FBR. Out of total $149 million, UK-based DFID had committed to provide $25 million grant while the WB had agreed to lend $78 million IDA credit (soft loan) and $24.4 million IBRD loan (commercial loan). Pakistan had committed to share the remaining amount of $23.1 million.