A World Bank report on Pakistan economy rates the country's tax reform program as moderately satisfactory, but it flags substantial risks to how the reforms are carried out. The bank cited political and governance challenges, alongside risks linked to the economy, institutional capacity and financial management. The program is meant to strengthen domestic revenue, so the rating bears on how the state raises money for public services.
What the bank found on tax reform
The World Bank report on Pakistan economy covers the Pakistan Public Resources for Inclusive Development program. The program is described as part of a broader financing initiative worth about $700 million, and the World Bank's board approved it on December 19, 2025. It supports federal and provincial reforms to mobilise domestic revenue, improve public spending and use data and digital tools to deliver services.
The bank said progress has been strong across most disbursement-linked indicators, which are targets tied to the release of funds once they are met. The government is also working to put technical assistance and implementation arrangements in place after changes to project activities and cost allocations.
Pakistan's tax-to-GDP ratio, which measures tax collected as a share of the size of the economy, was 12.3 percent in June 2025. The program aims to raise it to 15 percent by June 2030. The bank gave the program a substantial risk rating, citing political and governance concerns along with risks to the economy, institutional capacity, financial management, sector policies, and environmental and social standards.
Delays in statistics and a Punjab digital program
The bank flagged delays involving two bodies that produce official data. The chief statistician post has been vacant since September 24, 2026, even though a program requirement says it must stay filled throughout implementation. Delays also affect the establishment of the governing council of the Pakistan Bureau of Statistics, the federal agency that compiles official statistics. The government and the World Bank are working to reduce the effect of these delays on program conditions.
Separately, the bank rated the $70 million Connected Punjab Program, which runs through June 2031, as moderate-to-substantial risk. The program aims to expand broadband, improve digital public services, support artificial intelligence readiness and increase cashless transactions. The bank acknowledged strong support from the Punjab government, and the Punjab Information Technology Board has secured provincial approval.
What happens next
The next steps for the Punjab program include an AI Oversight Committee, a data governance framework, a personal data protection strategy and a cybersecurity strategy. For the federal program, the bank's assessment does not give a date for filling the chief statistician post or setting up the governing council, so the timing of those fixes remains open.
Aasan alfaaz mein
World Bank ne Pakistan ke tax reform program ko 'moderately satisfactory' rating di hai, lekin is par bade khatre bhi batae hain. Government ko June 2030 tak tax-to-GDP ratio 12.3 percent se barha kar 15 percent tak lana hai. Chief statistician ki aasami abhi khali hai aur statistics ke idare ki governing council ka qayam bhi mukammal nahi hua. Aam shehri ke liye report mein bijli, petrol ya tanakhwah par fori asar ki tafseel nahi di gayi, lekin yeh tax system ki tabdeeli ka aham imtehan hai.
