The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) Pakistan Raises Revenue (P165982) SOUTH ASIA | Pakistan | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 1 | ARCHIVED on 23-Sep-2019 | ISR37991 | Implementing Agencies: Islamic Republic of Pakistan, Federal Board of Revenue Key Dates Key Project Dates Bank Approval Date: 13-Jun-2019 Effectiveness Date: 18-Jun-2019 Planned Mid Term Review Date: -- Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2024 Revised Closing Date: 30-Jun-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) Contribute to a sustainable increase in domestic revenue by broadening the tax base and facilitating compliance Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Results-based component: This component includes four objectives areas: 1. Simple & transparent tax system, 2. Control of taxpayer obligations, 3. Compliance facilitation, 4. Institutional development:(Cost $320.00 M) Traditional IPF component: Upgrade of FBR's ICT systems:(Cost $80.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO -- ►Satisfactory Overall Implementation Progress (IP) -- ►Satisfactory Overall Risk Rating -- ►High Implementation Status and Key Decisions Initial steps towards project implementation are underway. The Program Office (PO) is operational and the Director and Deputy Director are working full time in close coordination with the World Bank team to put in place all actions needed for smooth project implementation. 9/23/2019 Page 1 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) The process for the selection of a Chief Information Officer for the FBR is underway. The CIO position is critical to provide cutting-edge technical leadership and vision for the FBR's transformation into an information-savvy revenue authority, able to effectively utilize big data and business intelligence to control tax compliance and improve efficiency of internal processes and taxpayer services. The recruitment of essential PO positions (Procurement Specialist, Financial Management Specialist, Contract Management Specialist, Environment and Social Specialist) is also underway. The PO is also expected to be strengthened with the upcoming assignment of several additional FBR officials to coordinate activities for the achievement of the project's targeted results. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance ►Substantial -- ►Substantial Macroeconomic ►Substantial -- ►Substantial Sector Strategies and Policies ►High -- ►High Technical Design of Project or Program ►Moderate -- ►Moderate Institutional Capacity for Implementation and Sustainability ►Substantial -- ►Substantial Fiduciary ►Substantial -- ►Substantial Environment and Social ►Moderate -- ►Moderate Stakeholders ►High -- ►High Other -- -- -- Overall ►High -- ►High Results PDO Indicators by Objectives / Outcomes Increased tax and customs receipts (% of GDP) IN00726982 ►Tax to GDP ratio (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13.00 -- 11.60 17.00 Date 29-Jun-2018 -- 30-Jun-2019 28-Jun-2024 The source of the report actual for FY2018/19 (July 2018-June 2019) is the Ministry of Finance, Fiscal Operations report, Comments: which however includes provisional data that may be revised in the coming months. 9/23/2019 Page 2 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) Expanded tax net IN00726983 ►Number of compliant tax payers (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,159.00 -- 2,200.00 3,500.00 Date 29-Jun-2018 -- 30-Jun-2019 28-Jun-2024 Taxpayer compliance facilitated IN00726984 ►Hours to prepare, file and pay/withhold CIT and GST measured by 'paying taxes indicator' in Doing Business (excluding social security contributions) (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 253.50 -- 253.50 130.00 Date 31-Dec-2018 -- 30-Aug-2019 28-Jun-2024 Hours to prepare, file and pay/withhold CIT and GST measured by 'paying taxes indicator' in Doing Business (excluding Comments: social security contributions) Customs clearance facilitated IN00726985 ►Hours spent for customs clearance at the border per the 'trading across borders' Doing Business indicator (average of exports, imports) (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 97.50 -- 97.50 48.50 Date 31-Dec-2018 -- 30-Aug-2019 28-Jun-2024 Hours spent for customs clearance at the border per the 'trading across borders' Doing Business indicator (average for Comments: exports and imports) Intermediate Results Indicators by Components Results-based: a) Simpler tax system, b) Compliance control, c) Facilitation, d) Institutional devt IN00726987 ►Simplified regulations for tax administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Tax laws do not incorporate The Customs Act, Sales Tax laws updated to later amendments in the main Tax Act, the Income Tax include all subsequent Value -- text and have different Ordinance and the Federal amendments in the text; provisions for tax Excise Act have been unified tax administration 9/23/2019 Page 3 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) administration. Customs Act updated incorporating all provisions for all tax not fully in line with amendments, including instruments; and Customs international agreements that those introduced by the Act is fully aligned with Pakistan is a party to. Finance Act of June 2019 Kyoto and TIR that are highlighted the Conventions. main text. Date 29-Mar-2019 -- 16-Sep-2019 28-Jun-2024 IN00726990 ►Automated sharing of taxpayer data (number of entities sharing data with the FBR) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.00 -- 3.00 20.00 Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 Entities that participate in automated sharing of taxpayer information with the FBR may include provincial tax authorities, Comments: utilities, telecom companies, banks, other firms acting as withholding agents, other federal government entities, and foreign jurisdictions. IN00726992 ►Systematic tracking of arrears (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Tax arrears tracked through Management Information System, No regular monitoring and No arrears tracking system collectability analyzed, Value reporting system on tax -- established. and at least of 60% of arrears in place. collectable arrears at the start of the FY are recovered. Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 Arrears are taxpayer obligations that are outstanding for payment after the specified deadline. Collectability criteria will be Comments: defined following an analysis to be conducted by the FBR (e.g. check whether a taxpayer is still in business). IN00726993 ►Effective risk management in Customs (% inspections & audits that detect material violations) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.50 -- 2.50 6.50 Date 29-Jun-2018 -- 30-Aug-2019 31-Jul-2024 Percentage of all customs inspections and post-clearance audits that detect material violations (as opposed to minor errors in Comments: the Goods Declaration). IN00726994 ►E-services for taxpayers and traders (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Online filing and payment, -- Mobile applications for Filing by mobile phone, and ATM payments GST taxpayer registration payments by credit/debit launched. and for registered users' card and non-banking services enabled; taxpayers 9/23/2019 Page 4 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) access to the Customs able to review their records WeBOC system launched. online; taxpayers able to offset liabilities against receivables across taxes and fiscal years. Date 29-Mar-2019 -- 30-Aug-2019 30-Jun-2023 Comments: Taxpayer services and functionalities available online (FBR website) and through mobile apps. IN00726995 ►Resolution of refunds (% of refunds claims resolved within 90 days) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5.00 -- 5.00 50.00 Date 29-Jun-2018 -- 30-Aug-2019 28-Jun-2024 Average time between a taxpayers' claim for a tax refund and rejection or payment of the refund by the FBR. Offsetting a Comments: refund against the taxpayer's other outstanding tax obligations counts as a payment of the refund. IN00726996 ►Authorized Economic Operator (AEO) program (# of firms accredited) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target AEO Program has not Value No AEO program in place -- 20 firms accredited been launched. Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 An Authorized Economic Operator Program allows accredited firms (based on their risk profile) to use of the green channel Comments: at border export and import control points. The targeted number of firms to be accredited is cumulative from the baseline. IN00726997 ►Technical streams and specialized functions established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target FBR staff are not assigned to At least 40% of grade 17 a specific function with officers assigned to a career prospects within the technical stream and function. Specialized non- receive specialized core functions (procurement, Technical streams have Value -- training. Dedicated units internal audit, not been established. for non-core functions communications, human established and staffed resource management) with externally hired staffed by generalists from professionals. within FBR. Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 Technical career paths (streams) established for FBR permanent staff (civil servants) in core tax and customs administration customs (e.g. business intelligence, audit, risk management, litigation).Specialized training courses designed and delivered Comments: for each technical stream. Specialized units established for non-core functions (e.g. procurement, communications, human resource management, internal audit) staffed with externally hired experienced professionals. IN00726998 ►Timely transfer tax receipts and reconciliation of accounts in the TSA (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 9/23/2019 Page 5 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) Banks transfer tax receipts Some tax receipts are Delays in posting some to the TSA at the end of reported manually and taxes paid to some Value -- each business day and transferred to the TSA with a branches of commercial reconciliation of accounts delay of 30 days or more. banks to the TSA persist. takes place monthly. Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 Time lag between payment by the taxpayer and transfer of the payment amount to the Treasury Single Account of the Comments: federal Government; regularity of reconciliation of receipts with commercial banks IN00726999 ►Women's representation among FBR staff (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4.50 -- 4.50 10.00 Date 29-Mar-2019 -- 30-Aug-2019 28-Jun-2024 Comments: Share of women among FBR staff of all grades Upgrade of ICT systems (traditional IPF) IN00726986 ►Obsolete ICT equipment replaced, legacy branded software updated, and active-active private cloud established (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 100.00 Date 28-Feb-2019 -- 30-Aug-2019 28-Jun-2024 Replacement of obsolete servers, computers, printers/scanners, network and datacenter equipment per list of identified Comments: items to be replaced. IN00726988 ►Data Warehouse with big data capacity and Business Intelligence tools are functional (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No -- No Yes Date 28-Feb-2019 -- 30-Aug-2019 28-Jun-2024 Data Warehouse with automated dashboard and data mining functions, working in multi-dimensional cubes and providing Comments: data on request IN00726989 ►FBR offices with full, permanent and reliable connectivity (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6.00 -- 6.00 42.00 Date 28-Feb-2019 -- 30-Aug-2019 28-Jun-2024 Comments: Fully connected FBR offices with 99% availability (24x7) IN00726991 9/23/2019 Page 6 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) ►Customs border stations with Automated Entry-Exit System (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 4.00 Date 28-Feb-2019 -- 30-Aug-2019 28-Jun-2024 Number of customs border stations with contactless scanning and weighing equipment that captures data from trucks carrying cargo at the border, automatically transmits the data to the WeBOC system for cross-checking with the Comments: corresponding GD, and directs trucks to the green, yellow, or red channels according to the risk rating provided by WeBOC. Overall Comments IR There is no change in the IRIs under Component 2, as the procurement processes have not been launched yet (though the General Procurement Notice has been published) pending the approval of the PC-I document by the Planning Commission. Disbursement Linked Indicators IN00727000 ►DLI 1 Scope of withholding regime reduced (number of withholding lines) (Number, Intermediate Outcome, 32,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Value 58.00 -- 57.00 20.00 Date -- -- 30-Aug-2019 -- One withholding line (section 236 W of the Income Tax Ordinance) on advance collection of income tax by persons/firms Comments: transferring or selling immovable property from the buyer/transfer beneficiary was abolished by amendments introduced with the Finance Bill in June 2019. IN00727001 ►DLI 2 Transparent tax system (Text, Output, 32,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 MoF (with input from FBR) has published in the ABS detailed tax Aggregate tax expenditure was Aggregate tax expenditure is expenditure, evidence- Value -- included in the ABS for the published. based revenue forecasts, FY2019/20 budget. and tax gap estimates disaggregated by tax instrument Date -- -- 30-Aug-2019 -- IN00727002 ►DLI 3 Coordination with provinces (Text, Intermediate Outcome, 34,000,000.00, 0.00%) 9/23/2019 Page 7 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 One data-sharing MoU with FBR has harmonized FBR to be signed by KP the definitions of Revenue Authority with FBR economic activities Value -- No MoUs signed yet by June 30, 2019, as prior result subject to GST/GSTS of KP Revenue Mobilization harmonized with all 4 PForR (P162302). provinces Date -- -- 30-Aug-2019 -- IN00727003 ►DLI 4 Track & Trace and electronic monitoring of production in key sectors (# of sectors) (Number, Intermediate Outcome, 32,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Value 0.00 -- 0.00 1.00 Date -- -- 30-Aug-2019 -- The application process for granting licenses to firms to undertake track and trace/ electronic monitoring of production is Comments: underway. IN00727004 ►DLI 5 New taxpayers identified through automated data sharing and ICT-based business intelligence (Number (Thousand), Outcome, 32,500,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Value 5.80 -- 5.80 500.00 Date -- -- 30-Jun-2019 -- IN00727005 ►DLI 6 Risk-based audit (Text, Intermediate Outcome, 40,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Value Risk-based audits piloted in one -- Audit cases for FY19/20 FBR has completed at FBR office selected through risk-based least 45 additional parameters. comprehensive field audits of Large Taxpayers and 15 issue- oriented audits for cases selected by the risk- based selection tool and monitored by the Compliance Unit through AMIS with associated reports 9/23/2019 Page 8 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) submitted to FBR management. Date -- -- 30-Jun-2019 -- IN00727006 ►DLI 7 GST filing simplification (Text, Intermediate Outcome, 32,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Single portal Online filing available on FBR Online filing and payment automatically calculates Value -- website available on FBR website and pays GST refunds to taxpayers Date -- -- 30-Aug-2019 -- Comments: The FBR has also recently launched a mobile app for the registration of new GST taxpayers. IN00727007 ►DLI 8 Goods declarations going through the red and yellow channels at the border (Percentage, Outcome, 40,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 Value 65.00 -- 65.00 25.00 Date -- -- 30-Aug-2019 -- Amendments to the Customs Act passed by the Parliament on June 27, 2019 provide for inspections of goods consignments at Comments: the border according to risk-based selection. IN00727008 ►DLI 9 FBR core business processes (BPs) simplified and automated (Text, Intermediate Outcome, 35,500,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 FBR has eliminated and replaced previously paper-based processes 3 business processes mapped with the newly Value -- 3 business processes mapped (exports, transit, transshipment) automated business processes created under the Business Process Improvement. Date -- -- 30-Aug-2019 -- Comments: Position of CIO has been advertised. IN00727009 ►DLI 10 Organizational effectiveness and transparency (Text, Output, 10,000,000.00, 0.00%) July 1, 2023 - June 30, Baseline Actual (Previous) Actual (Current) 2024 9/23/2019 Page 9 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) FBR has published six- FBR does not publish regular monthly report within 2 reports on KPIs, so no details of KPIs for the FBR have not months of end of Q2 Value -- FBR performance are available been adopted yet. and annual report on to the public. the KPIs within 3 months of end of FY. Date -- -- 30-Aug-2019 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P165982 IDA-64350 Effective USD 400.00 400.00 0.00 26.49 374.00 6.6% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P165982 IDA-64350 Effective 13-Jun-2019 17-Jun-2019 18-Jun-2019 30-Jun-2024 30-Jun-2024 Cumulative Disbursements 9/23/2019 Page 10 of 11 The World Bank Implementation Status & Results Report Pakistan Raises Revenue (P165982) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 9/23/2019 Page 11 of 11