Pakistan greenlights $200m ADB loan despite questions over digitalisation project

ISLAMABAD: Pakistan on Friday greenlit another $200 million (Rs57bn) loan from the Asian Development Bank (ADB) for digitalisation, despite serious questions raised by the Planning Commission. The project was one of seven projects worth Rs116bn cleared by the Central Development Working Party (CDWP) at a meeting presided over by Planning Minister Ahsan Iqbal. He conditionally cleared the Rs57bn Transforming and Digitalising Revenue Administration (TADRA) project, which aims to increase the tax-to-GDP ratio to 13. 5pc by 2029 from 11. 1pc at present. The approval comes as the country has already utilised more than $4. 7bn in foreign loans aimed at improving revenue collection, while the tax-to-GDP ratio continues to hover around 11pc.

The planning minister “recommended the project to the Executive Committee of the National Economic Council (Ecnec), with the condition that the Pakistan Institute of Development Economics (PIDE), a state-owned think tank, thoroughly review its business model”, an official statement said. It was placed on record that PIDE had already conducted a study on loans taken by the government to reform the energy sector and tax administration, “which indicates that approximately $4. 7bn has been obtained from development partners to reform Pakistan’s tax system. “Therefore, the Revenue Division should conduct an impact assessment of previous reform interventions undertaken under the Tax Administration Reforms Programme (TARP), Pakistan Single Window (PSW), Integrated Transit Trade Management System (ITTMS) and Pakistan Raises Revenue Project (PRRP) — the four major loan programmes for the Federal Board of Revenue — to determine the impact of the reforms and value for money. ” The project’s clearance was necessary to secure a $200m loan that the ADB’s…