ISLAMABAD, AUGUST 15: According to the World Bank, the Pakistan Raises Revenue Project’s Disbursement Linked Indicators (DLIs) for lowering withholding tax (WHT) lines and putting in place a track and trace system are not keeping up with the goals.
According to official documents, the Bank has rated the $400 million Pakistan Raises Revenue project’s overall implementation progress as moderately satisfactory. The Bank also noted that the Federal Board of Revenue (FBR) will develop a plan to address obstacles and enhance the DLI implementation process.
According to the Bank’s official records, $327.93 million, or 81.98 percent, of the money has been dispersed thus far, with $64.35 million remaining undisbursed.
According to the Bank, generally sufficient progress has been made toward achieving the goals of project development. A number of Disbursement Linked Indicators (DLIs) have demonstrated increased performance, as attested to by the World Bank team and the third-party validation report. It consists of:
- publication of detailed tax expenditure and evidence-based revenue forecast report (2).
- functional data sharing with all provincial tax authorities (DLI 3).
- surpassing the target for risk-based audits, as FBR completed 113 comprehensive field audits of large taxpayers and 784 issue-oriented audits (DLI 6).
- piloting a single returns portal for GST and GSTS with four provincial GSTS authorities, covering the telecom sector (DLI 7).
- improved customs efficiency with reduced physical inspections at the border – from a baseline of 65 percent goods declared through red and yellow channels in FY19 to 29 percent in FY24 (DLI 8).
- elimination and replacement of previously paper-based processes with newly automated internal business processes (DLI 9); and
- the continued tracking of Key Performance Indicators and publication of the annual results report for FY23 and a bi-annual report for fiscal year 2024.
The annual report for fiscal year 2024 is being finalized (DLI 10). However, DLIs 1 (reduction in WHT lines) and 4 (implementation of track and trace system) are lagging behind relevant targets. FBR will prepare a strategy to address challenges and improve the implementation of these DLIs.
The procurements under component 2 have shown substantial progress. In particular, large procurements of hardware and software for data centers, and equipment for customs automated entry-exit systems are in process.
The technical streams have not been established in FBR. However, FBR officers are assigned to different positions relevant to technical/core and non-core functions, such as procurement, internal audit, communications, etc. To design/re-design training for core and non-core functions, a need-based training plan is being developed by FBR.
Procurement is underway for AEES-related hardware and software, to be delivered by December 2024 / January 2025. Some components of the Automatic Entry & Exit System (AEES) are being introduced including the Pre-Arrival Clearance system deployed in WeBOC.
In this configuration, electronic notifications are sent to Terminal Operators (TOs) of the cargo release prior to vessel arrival. An Automated Exit pilot program has been carried out in association with South Asia Pacific Terminal (SAPT) and the collectorate of Customs Appraisement (East). The collectorates are working with TOs to modify their business procedures, hardware, and software in order to set up the system required for an AEES that operates properly.
