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April 16, 2019

Govt to raise $400mln in foreign loan to introduce tax reforms

Business

April 16, 2019

ISLAMABAD: The government on Monday decided to secure $400 million in loan from foreign lenders, mainly the World Bank, to introduce reforms in the Federal Board of Revenue to expand the tax base that is vital to reduce widening revenue-expenditures gap.

The Central Development Working Party (CDWP) took the decision at a meeting presided over by the Minister for Planning, Development and Reform Makhdoom Khusro Bakhtiar. Secretary Planning Zafar Hasan and senior officials from federal and provincial governments were also present.

Bakhtiar said the government has the political will and is committed to enhance tax revenue collection by mobilising internal resources. “The FBR will bring the best policy under the proposal for increasing tax revenue collection,” the minister for planning said in a statement.

The CDWP approved concept clearance proposal of the Federal Board of Revenue related to domestic resource mobilisation. The project has an estimated cost of $400 million (Rs27.8 billion).

Official said the august body approved the start of negotiations with the foreign lenders, mainly the World Bank, to secure the loan. “Once basic terms are finalised the project will again be presented to the CDWP for approval,” an official told The News.

The CDWP further approved a hydropower project in Khyber Pakhtunkhwa estimated to cost Rs552.708 million, while it referred three projects worth Rs209.5 billion to get assent of the Executive Committee of National Economic Council (Ecnec).

Projects related to energy, transport and communication sectors were presented at the meeting. Particularly, three projects were related to energy sector.

The CDWP recommended an energy project of 500 kilovolts high voltage direct current transmission system between Tajikistan and Pakistan for Central Asia-South Asia transmission interconnection (CASA-1000) worth Rs45.989 billion to the Ecnec. The power division presented the project, which envisions transmission of electricity from Tajikistan to Pakistan through Afghanistan. The energy and power department of Khyber Pakhtunkhwa presented second energy project worth Rs552.708 million, which was approved. The project, ‘preparation advance facility for proposed World Bank-assisted Khyber Pakhtunkhwa hydropower development project’, aims at to accelerate hydropower development in the province. The World Bank assistance is sought to accelerate development of hydropower projects in the province.

The provincial energy department also proposed another project worth Rs85.912 billion, which was recommended to the Ecnec for consideration. The project, ‘Balakot hydropower project’, envisions construction of 310 megawatts of hydropower dam on Kunhar River – a major tributary of Jhelum River. The project will provide reliable and consistent power to local areas and the grid.

The CDWP approved a concept clearance proposal of Karachi urban mobility project (yellow line bus rapid transit) worth Rs65.968 million, which was presented by Sindh.

The province also proposed a project worth Rs77.598 billion in the transport and communication sector, which was referred to the Ecnec. The construction of bus rapid transit red line project envisages construction of metro bus dedicated corridors measuring 29.1 kilometers in length from Numaish to Malir Halt depot and a common corridor of 2.4 kilometers. T

he project will contribute to development of a sustainable urban bus transport system in Karachi with less travel time and enhanced mobility and accessibility. Around 320,000 passengers per day are estimated to benefit from the project.

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