The World Bank has rated Pakistan’s tax reform program as moderately satisfactory but flagged substantial risks to its implementation, including political and governance challenges, as the country seeks to increase its tax-to-GDP ratio to 15 percent by June 2030.
The Washington-based lender assessed its Pakistan Public Resources for Inclusive Development program, part of a financing initiative worth about $700 million, as moderately satisfactory overall.
The program aims to support economic stability, improve public service delivery and strengthen domestic revenue collection.
Pakistan’s tax-to-GDP ratio is targeted to rise from 12.3 percent in June 2025 to 15 percent by June 2030. The World Bank assigned the program a substantial risk rating, citing political and governance concerns alongside risks related to the economy, institutional capacity, financial management, sector policies, and environmental and social standards.
The bank said progress had been strong across most disbursement-linked indicators, reflecting continued momentum in the reform program.
The government is also working to operationalize technical assistance and implementation arrangements after adjustments to project activities and cost allocations.
However, the lender flagged delays involving the appointment of the chief statistician and the establishment of the governing council of the Pakistan Bureau of Statistics. The chief statistician position has remained vacant since September 24, 2026, despite a program requirement that it remain filled throughout implementation.
The government and the World Bank are working to address these delays and reduce their impact on program conditions and reform implementation.
Separately, the bank assigned a moderate-to-substantial risk rating to the $70 million Connected Punjab Program, which runs through June 2031. The program aims to expand broadband connectivity, improve digital public services and artificial intelligence readiness, and increase cashless transactions.
The World Bank acknowledged strong support for the Punjab program from the provincial government. The Punjab Information Technology Board has secured provincial approval, while the next steps include advancing an AI Oversight Committee, a data governance framework, a personal data protection strategy and a cybersecurity strategy.
The $700 million Pakistan Public Resources for Inclusive Development program was approved by the World Bank’s board on December 19, 2025. It supports federal and provincial reforms to mobilize domestic revenue, improve public spending and use data and digital tools to strengthen service delivery.
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