The World Bank has flagged substantial risks to Pakistan’s tax reform program, warning that political and governance challenges could affect implementation as the country aims to increase its tax-to-GDP ratio to 15 percent by June 2030.
The lender rated its $700 million Pakistan Public Resources for Inclusive Development program as moderately satisfactory overall. The initiative supports efforts to increase tax collection, improve public spending and strengthen government service delivery.
Pakistan aims to raise its tax-to-GDP ratio from 12.3 percent in June 2025 to 15 percent by June 2030. However, the World Bank assigned the program a substantial risk rating, citing political and governance concerns, economic uncertainty, limited institutional capacity, financial management issues, sector policy risks and environmental and social considerations.
Despite these concerns, the bank reported strong progress on most disbursement-linked indicators. The government is also working to establish technical assistance and implementation arrangements following changes to project activities and cost allocations.
However, delays in key appointments and institutional arrangements remain a concern. The position of chief statistician has been vacant since September 24, 2026, while the governing council of the Pakistan Bureau of Statistics has yet to be established. The program requires the chief statistician’s position to remain filled throughout implementation.
These delays could affect compliance with program conditions and complicate the implementation of reforms. The government and the World Bank are working to resolve the issues and limit their impact.
Separately, the World Bank assigned a moderate-to-substantial risk rating to the $70 million Connected Punjab Program, which runs until June 2031.
The initiative aims to expand broadband access, improve digital public services, strengthen artificial intelligence readiness and increase cashless transactions. The lender acknowledged strong support from the Punjab government, while the Punjab Information Technology Board has secured provincial approval for the program.
The next steps include advancing an AI Oversight Committee, a data governance framework, a personal data protection strategy and a cybersecurity strategy.
The World Bank’s board approved the $700 million Pakistan Public Resources for Inclusive Development program on December 19, 2025. It supports federal and provincial reforms aimed at increasing domestic revenue, improving public expenditure and using data and digital tools to strengthen public services.
