Tax Reform: FBR in talks with World Bank for $400 million loan

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Federal Board of Revenue or FBR is in phase of discussion with the World Bank for about $400 million loan.

FBR is in talks with World Bank to avail 400 million US Dollar loan. According to sources, negotiations between World Bank and FBR are currently in progress, and the positive result is expected in few days.

However, negotiations may include the tax reforms such as conditions to develop the constitutional body for resolving tax disputes between provincial and central governments, and also making changes in tax structure for the agriculture sector.

According to reports, World Bank also sought common policies and administration for income tax and sales tax aimed to end the overlapping of different policies of provincial and federal revenue authorities.

Earlier, World Bank estimated that country’s current tax to GDP ratio is 12.6% of GDP that should ideally be 23% of GDP. However, World Bank wants FBR to shift them from the profit based income tax to the turnover taxation as it can help in the significant reduction of tax evasion by the corporate sector.

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