Govt to surrender $49.217m to WB

KARACHI - Pakistan government has planned to surrender $49.217 million surplus amount of fund to the World Bank from the revised cost of 'Tax Administration Reforms Programme funded by the bank, sources told The Nation.
The original cost of the project was Rs9.50 billion that included Rs2.30 billion share of Pakistan government and Rs7.20 billion ($122.958 million) World Bank credit/grant.
However, the project has been revised for approval of higher forum of ECNEC which would meet on August 20, 2009 in Islamabad.
According to revised plan of the project available with The Nation, the Planning Commission has made revision in the original structure of the project including increase in the scope of the objectives and cut in total cost of the scheme.
The revised cost of the project has been estimated at Rs6.47 billion from original estimate of Rs9.50 billion and the surplus amount, belonging to the World Bank would be surrendered by the government, said sources.
The Planning Commission has lowered the share of federal government to Rs1039.058 million against original estimated cost of Rs2307.576 million, while Foreign Exchange Component in the project has also been reduced to Rs5433.759 million ($73.785m) against Rs7193.041m ($122.958 million) in original plan of the project.
The original plan of the project was approved by the ECNEC in 2005, while the scheme was supposed to be completed in 60 months (from 2005 to December 2009). But under the revised plan, the completion period has been extended to 84 months (2005 to December 2011).
The project is being executed by the Federal Board of Revenue while the location of implementation would be FBR Islamabad and its field offices in the country.
However, official said that the objectives have also been enhanced in the revised plan of the project to bring enhancement in the scope of work for RTOs and establishment of one more RTO at Islamabad. Meanwhile, enhancing the scope of work for establishing 'Model Customs Collectorates in major cities throughout Pakistan are made part of the revised plan of the project.
However, the establishment of Passenger and Trade Facilitation Centres (PTFCs) alongside the borders, railway stations and airports is the main part of the revised plan of the project. The upgradation of training facilities in the directorates of training, revision in budget for technical assistance, introduction of some new critical fields for technical assistance and revision in the cost estimates for software/hardware and automobile are also scope of revised plan of the project.
While, in the original plan, the objectives of the project were to increase revenue, Tax-GDP ratio, to achieve financial and administrative autonomy through brining legal changes, to restructure the FBR along with the financial lines and develop a self-trained and motivated work force in order to develop and manage modern efficient revenue administration.
Furthermore, to develop effective working relationship with taxpayers and other government departments those contribute to increased compliance and improved services, while to increase the revenue collection through broadening of tax base and to eliminate revenue leakages are also to be achieved through adopting this project.
An official said that this project is in line with the objectives of MTDF of 2005-2010. An amount of Rs1472m including 1222m as WB/IDA loan has been allocated for the project in PSDP of FY'05-10.
Discussing the issues faced by the taxation sector, official said that the poor public policy formation and analysis, lack of trained professionals with the capability to address the complex issues of present day economic management, deterioration in the quality of civil services and poor tax administration are some of the drawbacks of the project.
Officials said that Chairman ECNEC has granted anticipatory approval to the revised project and downward revised cost of Rs6472.817 million extending its completion period to December 31, 2011 and surrendering of surplus funds of $49.217m to WB.