ISLAMABAD:
Pakistan entered into an agreement on Friday to utilise the resources of the Bill and Melinda Gates Foundation to improve the poor efficiency of the Federal Board of Revenue (FBR), aimed at enhancing an extremely narrow tax base and low collection.
A memorandum of understanding (MoU) was signed by representatives of the FBR and Karandaaz Pakistan – an entity sponsored by the UK’s Foreign, Commonwealth and Development office and the Bill and Melinda Gates Foundation.
The CEO of Karandaaz Pakistan, Waqasul Hasan, also met with Finance Minister Muhammad Aurangzeb before the signing of the agreement. Aurangzeb has vowed to completely digitise FBR, aimed at ending corruption and leakages.
By using financial resources from the Gates’ foundation, Karandaaz Pakistan will hire a consulting firm to assess the business needs, existing IT infrastructure, systems, business processes, all existing available information, and assessment reports to establish the context and scope of work for digitalising the tax system of Pakistan.
On the instructions of Prime Minister Shehbaz Sharif, Karandaaz Pakistan was engaged to revolutionise the obsolete tax system. The decision to involve Karandaaz Pakistan underscores that the World Bank’s $400 million Pakistan Raises Revenue and the Asian Development Bank’s $300 million Domestic Resource Mobilisation programmes have failed to yield the desired results.
Pakistan’s tax-to-GDP ratio hovers around 9%, while less than 3.4 million people are active taxpayers – two numbers that speak volumes about the inefficiency of the FBR and the failed donors-driven past attempts to restructure the tax machinery.
