World Bank Rates Pakistan’s Tax Reform Programs as Moderately Satisfactory

ISLAMABAD: The World Bank has assessed its two loan programs in Pakistan, totaling approximately $670 million, as ‘moderately satisfactory’ while highlighting ‘substantial risk’ associated with their implementation. These initiatives aim to bolster macroeconomic stability, enhance service delivery, and elevate the tax-to-GDP ratio to 15% within five years.

In a public disclosure, the Washington-based institution evaluated the overall execution of the $700 million financing for the Pakistan Public Resources for Inclusive Development — Multiphase Programmatic Approach (PRID-MPA) as ‘moderately satisfactory’. The loan, effective from June 19, 2025, seeks to increase the tax-to-GDP ratio from 12.3% in June 2025 to 15% by June 2030. The assessment reflects significant political and governance risks, alongside moderate to substantial risks across various sectors.

This rating underscores the challenges facing Pakistan’s economic landscape, where high political instability and governance issues could impede progress. The World Bank’s substantial risk rating indicates that while there are efforts to improve fiscal health, the path forward remains fraught with challenges that could affect citizens’ economic well-being and the overall stability of the country.

Looking ahead, the World Bank’s ongoing engagement with Pakistani authorities will be crucial in addressing these risks. Future meetings are expected to focus on refining strategies to enhance institutional capacity and ensure effective implementation of the loan programs.