WB refuses to extend funds to Pakistan

The refusal comes in the backdrop of slow pace of structural reforms in tax policy, power sector and closing of the IMF program for Pakistan.According to the World Bank, progress in improving macro-economic management has been weak and citing the slow pace of structural reforms, particularly in tax policy and administration and the power sector, followed by the recent closing of the IMF program, the Bank has been unable to extend the development policy funding under the CPS proposed series of Poverty Reduction Support Credits.However, World Bank is of the view that though approval of Reformed General Sales Tax (RGST) was postponed due to lack of political consensus, some technical progress has been made in managing taxes including removing some tax exemptions, broadening the tax base, increasing the number of e-taxpayers, and reducing the backlog of sales tax refunds.“Given limited progress and lack of the PRSC instrument, the original CPS goals of reducing the fiscal deficit to 3.5 per cent and raising the tax to GDP ratio to 12.7 per cent by next fiscal year 2012-13 are no longer realistic and have been updated to more modestly help the government contain the deficit to below 5.5 per cent of GDP and bring the tax to GDP ratio back in the double digits. --Online