AGR OCTOBER 2016 - MARCH 2017 SIX-MONTHLY UPDATE · Pakistan's iscal architecture has undergone a...

SIX-MONTHLY UPDATE

AGR

from the British people

OCTOBER 2016 - MARCH 2017

Acronyms and Abbreviations

A&A AccountingandAuditingADB AsianDevelopmentBankBE BankexecutedBETF Bank-executedtrustfundCCICouncilofCommonInterestsDeM DebtManagementDMR DebtManagementReformsDMU DebtManagementUnitDPCO DebtPolicyCoordinationOf�iceEAD EconomicAffairsDivisionEE&C EnergyEf�iciencyandConservationEF ExternalFinanceES EnterpriseSurveyFBR FederalBoardofRevenueFCCL FiscalCommitmentandContingentLiabilitiesFD FinanceDivisionGDP GrossDomesticProductGoKP GovernmentofKhyberPakhtunkhwaGoP GovernmentofPakistanICT InformationandcommunicationtechnologyIFRS InternationalFinancialReportingStandardsISA InternationalStandardsonAuditingJPCL JamshoroPowerCompanyLimitedKP KhyberPakhtunkhwaKPIs KeyPerformanceIndicatorsMDTF-AGR Multi-DonorTrustFundforAcceleratingGrowthandReformsMIS ManagementInformationSystemMIS ManagementInformationSystemsMoF MinistryofFinance

MDTF-AGR OCTOBER 2016 - MARCH 20171

MTDS: MediumTermDebtManagementStrategyMWP MinistryofWaterandPowerNEECA NationalEnergyEf�iciencyandConservationAuthorityNEPRA NationalElectricPowerRegulatoryAuthorityPC PrivatizationCommissionPEECA PunjabEnergyEf�iciencyandConservationAgencyPEFMA PakistanElectricFansManufacturersAssociationPSE PublicSectorEnterprisePSEs PublicSectorEnterprisesRE Recipient-executedRETF Recipient-executedtrustfundRFO ResidualFurnaceOilROSC ReportonObservanceofStandardsandCodesSLIC StateLifeInsuranceCompanySN-DeMPA SubnationalDebtManagementPerformanceAssessmentSOE State-ownedenterpriseSOE state-ownedenterprisesSRO StatutoryRegulatoryOrderT&D Transmission&distributionTA TechnicalassistanceTF TrustfundUNCTAD UnitedNationsConferenceonTradeandDevelopmentVAT Value-addedtaxWBG WorldBankGroup


OVERVIEW Multi Donor Trust Fund for Accelerating Growth and Reforms

Overthepastsixmonths,asetofconcretemilestoneshavebeenachievedbytheMultiDonorTrustfundforAcceleratingGrowth andReforms (MDTF-AGR) through technical assistance (TA) and continuous support to Federal and provincialinstitutions.WithregardtotheDebtManagementReforms,goodprogresswasmadeunderthePunjabDebtManagementSupport Program, revolving principally around supporting sound debtmanagement operations, capacity building, andstrengtheningdebtmanagementat theprovincial level. ARecipient-executedTrustFund(RETF)wasapproved for theMinistryofFinance(MoF)underwhichtheMinistrywouldbesupportedinthemonitoringandevaluationoftheMediumTermDebtManagementStrategy(MTDMS),improvingcoordinationamongdebtagenciesatfederallevel,managingrisksinthedebtportfolioandmonitoringandevaluationoftheMTDMS.

The EnergyReform component nowhas in place a practical programof support for strengthening and revision of theregulatoryframework,andtheoperationalizationof theGovernment'sreformvision intheoilandgassector. ProgramimplementationwithNationalElectricPowerRegulatoryAuthority(NEPRA)hasalsoprogressedwell,andanumberoftechnicalandregulatoryinitiativeshavebeensupported.However,therehasnotbeensigni�icantactivitywiththeMinistryofWaterandPower(MWP),norwiththePrivatizationCommission(PC),whichmirrorstheprogressintheworkprogramsoftheseagenciesandtheirevolvingpriorities.Giventhestallingoftheprivatizationprogram,focuswillhenceforthbeonthereformsneededwithinthepowersectorstate-ownedenterprises(SOEs).

Due to the slowdown in theprivatizationprocess, the formerSOEandPrivatization componenthashad to reorient itsactivitiestofocusmoreonprivatesectordevelopmentwithemphasisonenhancedcompetition,transparency,accountabilityandsectoralreformstoenhancethecompetitivenessoftheprivatesector.InadditiontoactivitiescompletedunderthePublicSectorEnterprises(PSE)RegulatoryandMonitoringFramework,PSECorporateGovernanceReforms,andPublicPrivatePartnership (PPP) Development, the Private Sector Development program is undertaking two new subtasks i.e. a Jobs


diagnostic;andastudyontheEconomicempowermentofwomen.ThejobdiagnosticwillhelpdeterminetheaggregatetrendsinemploymentandproductivityandfactorsbehindGrossDomesticProduct(GDP)percapitaandlaborproductivitychanges,whilsttheEconomicEmpowermentofWomenstudywillbeusefulinunderstandingthedriversandinhibitorstowomenemploymentopportunitiesinPakistan.

Afteradvancingrapidlyoverthe�irst22monthsofitsoperations,theTaxPolicyandTaxAdministrationReformcomponentisnowatastrategicturningpoint.Detailedreformplanshavebeenpreparedfollowingaseriesofcomprehensivediagnostics.Goingforward,theemphasiswillnowbeonimplementingthekeypillarsoftherequiredreformsunderthecomponent.Atthefederallevel,plannedactivitieswillfocusonanumberoftasksintaxpolicy,ICTandaudit.Attheprovinciallevel,theteamwillcontinuetosupportpartnersinPunjabandSindhwithrevenuepolicyandadministrationreforms. TherecentlyapprovedRETFwillenabletheFederalRevenueBoard(FBR)toimplementpolicyinformeddecisionsindomesticrevenuemobilization,therebyimprovingproductionofannualcomprehensivetaxexpenditureanalysis;andforecastsofannualtaxrevenuesofFBRandprovincialgovernments.

TheMDTF-AGRreceivedanadditionalUS$4.48millioncoveringOctober2016toMarch2017.Thusfar,atotalofUS$20.5millionhasbeenreceived.TotaldisbursementsstandatUS$12million(59percent).TheTrustFund(TF)hascommittedUS$7.6millionandforecastexpendituresofUS$5.9millionfromApriltoSeptember2017,includingRETFactivities.


Distribution of funds (US$ mn)

RETF (Debt Management)7%

RETF(Tax Reforms)22%

Tax Policy andTax Administration Reform35%

Energy SectorReform Support12%

SOE Reforms and Privatization10%

IFC Punjab Energy Efciency 4%Debt Management Support Program5%

0

Grant Amount USD

Disbursements USD

Tax Policy & Tax AdministrationReform

1,000,000

Disbursement and commitments against each child TF

Dept ManagementSupport Program

SOE Reforms and Privatization

Energy Sector Reform Support

IFC Punjab Energy EfciencyIFC SOE Reforms and PrivatizationProgram Management

Commitments USD

Forecast

7,586,08

5,752,94

325,253

1,800,00

1,050,00

702,114

76,805

150,000

2,270,00

1,904,30

190,436

1,200,00

338,438

258,699

5,319

50,000

2,650,00

2,123,61

402,781

800,000

814,967

814,966

-

800,000

472,158

246,038

100,000

IFC SOE Reforms & Privatization4%Program Management1%

US $2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

RETF (Debt Management) RETF (Tax Reforms)

1,500,00

1,500,00

500,000

4,900,00

4,900,00

1,300,00


TheDebtManagementReforms(DMR)componentoftheMDTF-AGRisaimedatstrengtheningdebtmanagementatthenationalandsub-nationallevels.Atthefederallevel,DMRisexpectedtohelptheGovernmentofPakistan(GOP)monitorandevaluate a debtmanagement strategy that contributes to �iscal anddebt sustainabilitywhileminimizing funding costs.Achievingthiswillrequirebuildingcapacityintheentitiesresponsiblefordifferentdebtmanagementfunctions.ThedesignofthefederalprogramisbasedontheGOP'srequesttostrengthenthreeinstitutions:theDebtPolicyCoordinationOf�ice(DPCO)MOF,theExternalFinance(EF)Wing(MOF)andtheEconomicAffairsDivision(EAD)asstandaloneentitiesresponsiblefordebtmanagement.Accordingly,thefederalcomponentofDMRisdesignedtoimprovedebtmanagementpracticesbyhelpingtheauthoritiesstrengthenthreekey functions: (i) themonitoring&evaluationofadebtmanagementstrategyandriskmanagementattheDPCO,(ii)externaldebtrecordingandreportingattheEADand(iii)fundinginexternalmarketsattheEF

Duration: December 2014- December 2018Program Development ObjectiveTo ensure that government debt management in Pakistan (both at the national and subnational levels) is on a sound policy and operational footing, so as to contribute to the wider objectives of sustaining macroeconomic stability and ensuring the efciency of the government's nancial management.

Overview

Debt Management Reforms

Execution Mode: Bank Executed (BE)

US$ 1,050,000Allocated Budget:

US$ 76,805 (7.3%)Outstanding Commitments:

US$ 702,114 (66.9%)Disbursement till April 15, 2017:

for the period from April-September 2017 Expenditure forecasts:

Bank Executed Trust Fund (BETF): US$ 150,000

RETF: US$ 500,000


Wing(MOF).TheseactivitieswillbecarriedoutthroughtwostandaloneRETFs,oneencompassingtheDPCOandExternalFinanceWing(MOF)andtheotherfortheEAD.However,�inalizingactivitiesunderthefederalcomponenthastakentime,givenitscomplexityandinvolvementofmultiplestakeholders.Pakistan's �iscal architecture has undergone a fundamental change with the introduction of the 18th ConstitutionalAmendment.OnJuly12015,theNationalEconomicCouncildecidedtoallowtheprovincestoborrowinthedomesticmarket.Thischangehasheightenedtheneedtostrengthennotonlyfederalbutalsoprovincialdebtmanagementandthus,theDMRprogramalsoworksatthesubnationallevel-inSindhandPunjab.Thisaccountsforalmost75percentofPakistan'stotalsubnationaldebt.

TheachievementsoftheDMRcomponentincludeonsitemissions,offsitesupportandcontinuedengagementwithclientagencies.

Atthefederallevel,achievementshaveincludedsupportingMoF(DPCOandEFWing)insettinguptherecipient-executedtrustfundintermsof�iduciaryandprocurementrelatedactivities.ThegrantagreementofMoFRETFwassignedinthe�irstweekofJune2017andhasbeendeclaredeffective.

ThecomponenthasalsohelpedEADindesigningactivitiesunderthestandaloneRETFsetup.Moreover,thedraftagreementforProvisionofTechnicalAssistance(TA)withtheUnitedNationsConferenceonTradeandDevelopment(UNCTAD),whichistheproprietorofDMFAS,hasbeenclearedbyEAD.ThisprojectrevolvesaroundupgradingthecurrentversionoftheDMFASandtheassociatedcapacitybuilding.Giventheextensivebureaucraticrequirementsneededtokick-startRETFsfromtheclient'sside,thesettingupofthesewindowshasbeenunderprocessforawhile.

At the subnational level, considerable progress has been made on activities for the �irst year under the Punjab DebtManagementSupportProgram.Themainactivitiesrevolvearound(i)supportingsounddebtmanagementoperationsininternal organization, reporting and operational risk as far as PunjabDebtManagement Unit (DMU) is concerned, (ii)

Implementation Performance and Achievements as of March 2017


comprehensivecapacitybuildingonconceptualunderpinningsrelevanttodebtmanagement,and(iii)strengtheningdebtmanagementoftheprovinceplanstotapmarketsinnearfuture.

Moreover,thesubnationalcomponenthascontinuouslygaugedtheprogressundertheSindhDebtManagementSupportProgram.TheDMRissupportingtheGovernmentofSindhindesigninganappropriatedebtmanagementstrategyandacomprehensiveTAisinplaceforthistask.

Workisunderprogressondesigningadebtcash�lowprojectiontoolforbothSindhandPunjab.Inthisregardandtoreinforceownership,DMUof�icialsfrombothgovernmentsattendedaninternshipinWashington,DCorganizedbyWBTreasuryinDecember2016.Thetool'spurposeistoallowforbetterrecordkeepingandreportingonthesubnationalfuturedebtservicepayments. Nonetheless, such a tool cannot replace a debtmanagement information system,with secure database andprocessingcapabilities.OffsitesupportwasalsoprovidedtotheGovernmentofSindhonthedesignofitsdomesticborrowingoptions.

Onthecapacitybuildingfront,threekeytrainingswereheldtostrengthensubnationaldebtmanagement:(i)SubnationalDebtManagementPerformanceAssessment(SN-DeMPA)methodologyorganizedinLahoreduring26to28October2016,(ii)DebtManagement(DeM)StrategyconductedinKarachiduring31Octoberto2November2016,and(iii)afollow-upDeMStrategyheldinIslamabadduring20to25February2017.ParticipantsfromallprovincialFinanceDepartments(FD)andPlanningandDevelopmentDepartments(includingFederallyAdministeredTribalAreas)and(selected)academicsattendedthe�irsttwoevents.Thethirdeventwasastepfurtherwithaselectgroupofof�icials(includingDMUstafffromPunjabandSindh)fromacrossprovinceswhowereassistedinusingtheMedium-TermDebtManagementStrategy(MTDS)AnalyticalToolbyde�iningandanalyzingvariousstrategiesbasedonfundingoptionsavailabletothem.

Theoverallprogramhasalsohelpedof�icialsfromallclientagenciestoparticipateinspecializedtraining,mostlyorganizedinternationally.


Atthefederallevel,MoFwillbesupportedinexecutingtheRETF(June-September2017).Speci�ically,DPCOwillbesupportedinthemonitoringandevaluation(M&E)ofMTDS2015/16–18/19implementation,improvingcoordinationamongstalldebtagencieswithinthefederalarenaandmanagingrisksinherentinPakistan'sdebtportfolio.Inaddition,thissub-componentwillfacilitateEFWingininitiatingthecomprehensivecapacitybuildingprogramenvisagedundertheproject(July2017).Moreover,EADwillbesupportedininitiatingitsRETF(June-September2017).Thissub-componentwillalsostrivetoenableclientagencies'stafftoparticipateininternationalandlocalspecializedtraining(asandwhenrequired).

Atthesubnationallevel,theGovernmentsofPunjabandSindhwillcontinuetobesupportedincarryingoutactivitiesundertheirrespectivePrograms.Speci�ically,ongoingsupportwillbeprovidedin�inalizingthedebtcash�lowprojectiontoolaswellasindesigningadebtmanagementstrategyforSindh.Moreover,boththegovernmentswillbeassistedinpreparationforexecutingtheirdomesticdebtissuanceplan.

Theprogramalsoenvisagescontinuingknowledge-sharingevents(forallprovinces)suchasholdingamootinIslamabadondebtmanagementgovernancearrangementsatthesub-nationallevelinSeptember/October2017andenablingsubnationalgovernmentstafftoparticipateinlocalaswellasinternationaldebtmanagementtrainingandforums.

Planned Activities

MDTF-AGR OCTOBER 2016 - MARCH 2017WithintheNationalEconomicCouncil(NEC)limits1

1

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Energy Sector Reforms

Duration: December 2014- December 2018 Program Development ObjectiveTo support the Government of Pakistan's energy sector reforms program by strengthening the capacity of key institutions to design, implement, monitor and communicate the reform agenda.

Execution Mode: BE

US$ 2,650,000.00Allocated Budget:

US$ 402,780.94Outstanding Commitments:

US$ 123,609.57Available Balance:

Disbursement (for the period from October 2016-March 2017):

for the period from April-September 2017 Expenditure forecasts:

BETF: US$ 600,000 (disbursing existing commitments, plus US$200,000

in new commitments).

TheprimaryfocusoftheEnergyProgramhasbeenondeepeningtheengagementinthegassectortosupportacomprehensivemarket,structuralandregulatoryreforminthemid-streamanddownstreamaswellasaddressinglong-standingissuesintheupstreamoilandgassector. ThereformprocessisdrivenbytheMinistryofPetroleumandNaturalResources(MPNR)andinvolveskeysectorentities,includingtheDirectorateGeneralforPetroleumConcessions(DGPC)andOilandGasRegulatoryAuthority(OGRA).Apracticalprogramofsupportisnowinplacetosupportthestrengtheningandrevisionoftheregulatoryframework,andsupportingtheoperationalizationoftheGovernment'sreformvision.ProgramimplementationwithNEPRAhasprogressedwell,withanumberoftechnicalandregulatoryinitiativesbeingsupportedbytheProgram.Therehasbeennosigni�icantactivitywiththeMinistryofWaterandPower(MWP)andPCre�lectingtheprogressinthoseagencies'workprogramandevolvingpriorities.

Overview



Support toNEPRA: During the reportingperiod, international expert advisors engagedunder theProgram supportedNEPRAtariffdepartmentinareviewoftherateofreturnmethodology,andinthereviewofthemulti-yeartariffforK-Electric,withapendingchangeininvestor.Inaddition,theinternationalexpertsalsoprovidedinputstoNEPRAinitseffortstodevelopnewtransmissiontariffguidelines.

SupporttoNEPRA:TheinternationalexpertsprovidedfollowonsupporttoNEPRAinthereviewofatariffpetitionforaproposed 660 kV HVDC Transmission Line, including in the form of identi�ication of signi�icant cost and regulatoryimprovementsbasedoninternationalgoodpractice.

SupporttoMWP:Noactivitieswereinitiated.ThekeydevelopmentonthisfrontwastheprovisionofcommentsontheGovernment proposal related tomoving of independent regulatory agencies under administrative control of the lineministries.

SinceSeptember2016,thefollowingachievementsweremade:

PowerSectorReform


Supportforgassectorreformimplementation:ThereformprocesshasbeenledbyMPNR,andwassupervisedbyahigh-levelforum,titledtheGasSectorLeadershipCommittee,comprisingoftheFederalMinisterforPetroleumandNaturalResourcesasthechairandtheprovincialenergyministersasmembers.TheReformProgramteamhasbeensupportingMPNRineffortstooperationalizethereformvision,implementtheagreedactionsinaconsultativemanner,bringingtogetherallkeysectorstakeholders.ToprovidetherequiredtechnicalinputsandadvisorysupporttotheTechnicalCommittees,LeadershipCommittee, and the key agencies, the Energy Program Management Team, with TAGR funding, engaged a series ofindependentinternationalexpertconsultants.TheresultingSectorReformSupportteamcurrentlycomprisesagassectorstructuretechnicaladvisor,agassectorregulatoryadvisor,agassectorpolicyconsultant,apolicyandlegalexpertanda

GasSectorReform

11

�inancialandtariffexpert.Todate,threemeetingsoftheGasSectorLeadershipCommitteeandmorethandozensofworkinggroupmeetingsdedicatedtospeci�ictechnicalissueshavebeenheld,inIslamabad,andremotely,withsupportfromTAGR.

SupporttoMPNRindevelopinggassectorreformpolicystatement:Duringthereportingperiod,supportwasprovidedtoMPNRinthedevelopmentofapolicystatementthatformalizestheGovernment'svisionforgassectorreform.

SupporttoOGRAonkeyregulatoryactivities: Inthe lastsixmonths,signi�icantprogresshasbeenmadewithsupporttowardsthestrengtheningofthemid-anddownstreamgassectorregulatoryframework. DuringthereportingperiodimplementationoftheprogramoftechnicalsupporttotheOilandGasRegulatoryAuthority(OGRA),progresswasmadeunderseveralworkstreams(i)Thirdpartyaccesstonetworks,(ii)Tariffs,and(iii)Licensing.Technicalworkinggroups,ledbyOGRA,andwithparticipationfromsectoroperatingcompanies,madesubstantialprogressinrevisingthethirdpartyaccessrules,thelicensingframework(includingseparationoftransmission,distribution,andsalefunctions),anewtariffmethodology (which allows ring-fencing of RLNG costs, separation of transmission, distribution, and sale tariffs, andintroducesimprovementstotherateofreturnmethodologyforsettingtariffs),andend-consumertariffandsubsidypolicyforareformeddownstreamgassector(SeeTablebelow).Advanceddraftsofrelevantregulatorydocumentshavebeendeveloped by the OGRA-led working group support in a consultative manner with the participation of key sectorstakeholders,andwithcontinuingfacilitationandtechnicaladvisoryfromtheTAGR�inancedreformsupportteam.


SupporttoDGPC:Duringthereportingperiod,twointernationalexpertswereengagedtoreviewDGPCstructureandrulesofbusiness,andidentifyoptionsforincorporationofprovincialrepresentativesintoDGPCoperationsandprocesses.ThefocusofthetaskwastooutlinearangeofoptionsforincorporationofnewprovincialrepresentativesinDGPC'sdailyoperations,anddevelopmentofrulesofbusinessthatwouldfacilitatetheeventualindependenceofDGPC,andprovincialrepresentationinlinewiththe2012PetroleumPolicy.Inthisregard,adraftdiscussionnotefortheoperationalizationofare-organizedDGPCwithprovincialrepresentationhasbeensharedwithMPNR,DGPCandkeystakeholders.Thiswillbefollowedseparationofitsupstreamregulatoryfunctionsfrompolicyfunctionsandinstitutionalstrengthening.

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Implementation status of gas sector reforms

Document Status


Planned Activities

Overthenextsixmonths,thefollowingactivitiesareplanned:

Support toNEPRA: Supportwill continueon transmission tariffmethodologyenhancementsandadvisory supportoncompetitionandmarketdevelopmentdirectionsisenvisaged.(BySeptember2017)

Supporttogassectorreformimplementation:Thetechnical,advisoryandimplementationsupportbeingprovidedthroughtheSectorReformSupportTeamwillcontinue,especiallyintermsofdirectsupporttoMPNRleadershiponmovingforwardin implementing thesectorreform;anddevelopingkey tenetsofa tariffandsubsidypolicy toensuresector �inancialsustainabilitygoingforward.(ThroughSeptember2017)

SupporttoOGRA:ImplementationofactivitiesintheagreedprogramofsupporttoOGRAwillcontinue,movinginparallelworkstreams:(i)Tariffsmethodology;(ii)Licensing;(iii)TPAandNetworkCode;(v)communicationsandoutreachonreform.(ThroughSeptember2017)

SupporttoDGPC:Thenextactivityisthebeginningofastudy,requestedbyMPNR,focusingonareviewofDGPCrolesandresponsibilities,andinstitutionalstructureforitsmediumtermdevelopmentintoastrongerandindependentupstreamregulatoryagency.(ThroughSeptember2017)

EnergyEf�iciency

SupporttoPunjabEnergyDepartment:TheoriginalactivitysupportedtheestablishmentandstrengtheningofthePunjabEnergyEf�iciencyandConservationAgency(PEECA)anditsinitialprogrammingisnearlycomplete,withalmostalltheallocatedfundsdisbursed. PunjabGovernmentrequestedfollowonsupportfortheinitialsetupofafanreplacementprogram,whichaimseventuallytoreplaceonemillionfanswithenergyef�icientunitsthatmeetthestandardsthathavebeensupportedundertheoriginalactivity. Thetaskteamrequestedanadditional$100,000torespondtothisrequest,whichwouldbecarriedoutwiththesupportoftheoriginalteamthatadvisedPEECA.


IFC Support

Duration: December 2014- December 2018Program Development ObjectiveProvide transaction advisory to PC in order to attract the private sector in the efcient management and operations of one DISCO and a GENCO.

Execution Mode: Bank Executed

US$ 1.7 millionAllocated Budget:

$884,000Outstanding Commitments:

Disbursement: for the period from October – March 2017

for the period from November 2016-March 2017 Expenditure forecasts:

None given IFC's suspended mandate.

Giventhegovernment'sdecisiontostalltheprivatizationprogramespeciallywithinthepowersector,IFC'smandatesweresubsequentlyterminatedbythePC.However,thefocuswillbeonthereformsneededwithinthepowersectorSOEs.

Given the termination, IFChasdecommissioned theundisbursedamount (US$884k) to theparentTrustFund(TF) forreallocation.


Overview

TheEnergyEf�iciency andConservation (EE&C)policy and regulatory framework is a recentphenomenon inPakistan,especiallyinPunjab.Thenationallevelframework(NationalEnergyEf�iciencyandConservationAuthority(NEECA)Act)wasapprovedinJuly2016.TheimplementationofnationalEE&Cpolicyandlegalframeworkisdelegatedtotheprovinces.With


WorldBankGroup(WBG)assistance,PunjabhastakentheleadondevelopingastrategicframeworkfortheEE&Cinitiativeinlinewiththerelatednationalobjectives.TheabsenceofthisframeworkinthepastwasamajorbarriertodriveasystemicchangeonEE&CcoveringbothEE&Crelatedstandardsandlabellingaswellasaddressingbehavioraltendenciesinenergyconsumption.Thelabelingschemehasjustbeenapproved(NEECAAct)andtheapplicationsforlabelsreceivedthroughourassistance.Intypicalcases,ittakesafewyearsforthisschemetotakeeffect,butthingsaremovingveryquicklyduetotheurgency toget these fansoutby this cooling season.Weareassisting theGovernmentAsianofPunjabdevelop the fanreplacementprogramwhichwillbe implementedby thegovernmentand theAsianDevelopmentBank (ADB)with thereplacementofabout1millionfansinpublicbuildings.Itisverydif�iculttoseeimpactsfromaStandards&Labellingprograminsuchashortperiodoftime.Duetoourapproachtoworkintheprovinceanddirectlywithmanufacturers,wemaybeabletoachieveimpactsinarelativelyshortperiodoftime.ThegovernmenthasalreadystartedadvertisinglabeledfansinPunjabandwewilldoanevaluation towards theendof theproject toseewhatresultshavebeenachieved.WBG isensuringclosecoordinationwithrelevantauthoritiestoovercomeimplementationchallengesinatimelymanner.

Implementation Performance and Achievements as of September 2016

Certi�icationof12PakistanEnergyLabelfans:NEECAhasplayedthemostsigni�icantroletowardsthisachievement.TheprojectfacilitatedlinksbetweenNEECA,PakistanElectricFansManufacturersAssociation(PEFMA)andthePunjabEnergyDepartment.

Baselinemarketresearchonfans:Thisisthe�irstmarketresearchonenergyef�icientPakistanEnergyLabelfansinPakistan.Themain�indingsweresharedinthesecondstakeholderworkshopandthefanmanufacturersespeciallyfoundthisveryusefultoincorporateintheirmarketingstrategies.

PunjabEnergyEf�iciencyandConservationAgency(PEECA)mediacampaigntolaunchPakistanEnergyLabels:PlayedadirectroletoconvincethePunjabgovernmenttoenhancetheirmediabudgetallocationfromamodestUSD50,000toasigni�icantUSD500,000.Helpedassessthe�ivegovernmentprequali�iedmediacompanies,andrankedthemaccordingtorequiredcompetencies.


PromulgationoftheNEECAAct:Assistedinthecriticalroleofhelpinginterprettheimplicationsofthisnewlaw,especiallyforthePunjabprovince.TheprojectalsoassistedthePEECAutilizevariousprovisionsofthisfederallawtobuildtheirowncapacity.

PEFMAcollaborationwithNEECAandPEECA:Helpedconduct2StakeholderWorkshops,oneinGujratandtheotherinLahore.Theseweresuccessfulwiththeactiveparticipationofgovernmentandprivatesectorstakeholders.AsreportedbythePEFMAChairman,afterthesecondstakeholderworkshopthreeadditionalfanmanufacturershavecommittedtogettheirfanscerti�iedforthePakistanEnergyLabel.

Adoptionof250,000PakistanEnergyLabelfansforthePunjabSchoolsAsianDevelopmentBankproject:InteractedwiththeAsianDevelopmentBankprojectforsolarizationofschoolssinceAugust2016,andultimatelywasabletointegratethespeci�icationofPakistanEnergyLabelfansasaprocurementrequirement.

Designalargescale1millionfanprojectforconsiderationofdonorsandthePunjabGovernmentforeducationandhealthfacilities:Theprojectteamwasabletoconductactual�ieldsamplingofover600fansinstalledineducationandhealthfacilities.Trialreplacementrunsusingdifferentmethodsarebeingtested.

Designalargescale9millionfanprojectforconsiderationbythedonorsandPunjabGovernment:Theprojecthasdevelopedanestimationofbene�itsofPeakLoadReduction,AnnualElectricalEnergySavings,AnnualCostReductionandAnnual Greenhouse Gas emissions reduction resulting from the successful implementation of this large scale fanreplacementproject.

Refrigerators/freezersarethenextpriorityapplianceforcerti�icationofPakistanEnergyLabelforthePunjabEnergyDepartment:RespondedtoarequestfromthePunjabEnergyDepartmenttohelpidentifyapriorityapplianceforPakistanEnergyLabel.AdetailedsessionwasheldwiththePEECA,andafterconsideringallpotentialappliances,thedomesticFridge/Freezerwasselectedasthemostappropriateappliance.


BetweenApril–September2017,weintendtoundertakethefollowingactivities:

PrepareandpresenttheMillion+FanProjecttothePunjabEnergyDepartment(PED)AssistthePEDtopresenttheMillion+FanProjecttoprospectivedonorsConductactual�ieldtestingofinstalledfansinPunjabSchoolsConductactualtrialreplacementrunsoffansinPunjabhealthandeducationfacilities,about400fansAssistthePEDtodevelopamonitoringandevaluationmechanismfortheir20,000fanreplacementprojectConvincethePEDtoincludeintheprojectdesignandplanstheinstallationofabout250,000PakistanEnergyLabelfansinthe20,000schoolssolarisationprojectConvincethegovernmenttoconductafollowupmarketresearchafterthecommunicationscampaignAssistPEECAtoidentifythenextpriorityapplianceforcerti�icationofPakistanEnergyLabelAssistNEECAandPEECAtodevelopamatrixofpossiblenon-complianceslinkedtothePakistanEnergyLabel,referredtoasMonitoring,EvaluationandEnforcement

Planned Activities:


Private Sector Development

Duration: December 2014- December 2018Program Development ObjectiveThe development objective of this activity is to support the GoP in designing and implementing a strategic framework for PSE reforms, including effective privatization. The overall goal is to reduce the Government's direct participation in product and factor markets within a number of sectors, while increasing private sector participation and fostering competition.

Execution Mode: BE

US$ 2.17 millionAllocated Budget:

US$ 190,436Outstanding Commitments:

US$ 482,881Disbursement: for the period from April – October 2016:

Expenditure forecasts: US$ 1.2 million is expected to be committed under the

various sub-tasks till October 2017.

Owingtotheslow-downintheprivatizationprocess,thetaskteamhasreorientedactivitiesunderthecomponenttofocusonprivatesectordevelopmentgroundedinenhancedcompetition,transparency,accountabilityandsectoralreformsgearedtowardsenhancingthecompetitivenessoftheprivatesector.Thisreorientationisalsore�lectedinthenameofthecomponentwhich has been changed from 'SOE Reforms and Privatization' to 'Private Sector Development'. The component'sreorientation,goingforward,willentailcloseengagementwithsectoralregulatorybodiesandtheprivatesectorinadditiontothegovernment.Thisstrategicshiftinthenatureofactivitieswillfacilitateacceleratedgrowththroughtheapplicationofacascade approach which promotes ef�icient and just use of the scarce public and concessional resources to crowd-incommercialcapitalandminimizethepublicdebtburden.

Overview


Going forward, implementationof the respective subtaskswill be carriedout exclusively throughBETF, as insteadof acombinationofBETFandRETF.WhilethetaskteamhadintendedondeliveringtwoRETFsi.e.fortheImplementationandEconomicReformsUnit(IERU)andCompetitionCommissionofPakistan(CCP),processingdelayscoupledwiththeguidancereceivedduringthelaststeeringcommitteemeetinghaveledtothetaskteamdecidingagainstrecipientledimplementation.

Thekeydevelopmentoutcomesaretwo-fold:(i)the�iscaldrainonthegovernment'sscarceresourcesislikelytobereduced,and these resources can be redirected towards other socio-economic development goals; (ii) increased private sectorparticipationislikelytobringinprofessionalmanagement,investment,innovation,higherproductivity,andbetterservicedeliveryforconsumers.


ThePrivateSectorDevelopmentpillarofMDTF-AGRisaprogrammaticTechnicalAssistance(TA)comprisedofthefollowingsevencomplementaryactivities(alsoreferredtoassubtasks).Theseactivitiesinclude:

1.PSERegulatoryandMonitoringFramework;2.PSECorporateGovernanceReforms;3.CapacitybuildingofthePC;4.PPPdevelopment;and5.TechnicalassistancetotheCCP;6.Jobsdiagnostic;and7.Economicempowermentofwomen

Thefollowingactivitieshavebeencompletedundertherespectivesub-taskssinceOctober2016:


PSERegulatoryandMonitoringFramework

Inlinewiththespeci�icsinthepreviousprogressreport,andgiventhecurrentstatusoftheprivatizationprogram,thePSERegulatory andMonitoring Framework subtask is nowgeared towards ensuring that the federal and subnational PSEsoperateef�icientlyandtransparentlywithclearaccountabilities.

TheCorporateFinanceUnitof theFinanceDepartment,GovernmentofPunjabhasbeensupportedover thepast sixmonths,includingsupporttotheunitindevelopingareportingformat,datarequirements,andadministrativeregulationsforprovincialPSEstoreporton�inancialperformanceandcompliancewiththeCorporateGovernanceRulesissuedbytheSECP.

Thissubtaskalsosupportedtwoconsultantsdevelopinga�inancialreportingsystemforPSEs.

PSECorporateGovernanceReforms

TheCorporateGovernanceAssessment forStateLife InsuranceCompany (SLIC)wascompleted.SLIC isaPSEand isPakistan'slargestinsurancecompanywithover5millionpolicyholders.TheCGassessmentreport's20recommendationsfocusonenhancingtheindependenceoftheBoardofDirectors,strengtheningtheBoardCommittees,limitingtheroleofthe Ministry of Commerce in day-to-day administration, empowering management, and improving the controlenvironment.Implementationoftheassessment'srecommendationswillservetoenhancetheef�icienciesofthecompanyandmayattractprivatesectorinvestmentandremoveentrybarriersinPakistan'sinsurancesector.

AReportonObservanceofStandardsandCodes(ROSC)onAuditingandAccountswascompletedforPakistan.Standardsand codes are benchmarks of good practices. TheROSC initiativewas launched in 1999 (byWBG and InternationalMonitoryFund)asaprominentcomponentofeffortstostrengthentheinternational�inancialarchitecture.Theinitiativeaims at promoting greater �inancial stability, both domestically and internationally, through the development,dissemination,adoption,andimplementationofinternationalstandardsandcodes.AspartoftheROSC,theAccountingandAuditing (A&A)modulecovers twogloballyacceptedstandards: the InternationalFinancialReportingStandards


(IFRS)andtheInternationalStandardsonAuditing(ISA).TheROSCalsolookedattheAuditingandAccountingpracticesofPSEsinPakistanandmademultiplerecommendationstoimprovetheaccountingpractices,fostergreateref�icienciesandenhancetransparency.

CapacityBuildingofPC

Thissubtaskhasbeendroppedfromthepillarowingtothecessationofthegovernment'sprivatizationprogram.Thetaskisbeingreplacedbyanewsubtasktitled'Cascade',detailsonwhicharegivenbelow.

PPPDevelopment

Activities under this subtask entailed support to the provinces and the federal government in the development of acomprehensiveframeworkforPPPs.

Balochistan:ADiagnosticonPPPReadinesswasdeliveredtotheGovernmentofBalochistan.

Sindh:TheSindhFiscalManagementFrameworkforPPPswasdeliveredbypreparingandhandingoverthereporttotheFinanceDepartment,GovernmentofSindh.WBGexpertsalsodeliveredatrainingtotheof�icialsofthePPPcellofSindhontheimplementationmodalitiesoftheframework.

KhyberPakhtunkhwa(KP):TheteampreparedanactionplanfortheGovernmentofKhyberPakhtunkhwa(GoKP)PPPcellinadditiontoprovidingcommentsontheKP'sPPPActandgivingtrainingtoof�icialsoftheGoKPsPPPcell.Thisactivitywasalsousedtodevelopinter-provincialdialogueandcoordinationbetweentheGoKPandGovernmentofSindhonPPPs.ThePPPteamofSindhhastrained5of�icialsfromKP'sPPPunit,PlanningandDevelopmentandTourismDepartmentsandtheprocesswillcontinue.


Federal:WBGsPPPexpertsreviewedthefederalPPPActandprovidedextensivecommentsonthegaps.TheremightbeanopportunitytotakesomethingoutofthisasaprioractionforthenextDPC.

AssistancetoCCP

ActivitiesunderthissubtaskoftheprivatesectordevelopmentpillarwereputonholdowingtoalackofclarityRETF.Basedontheclaritygiventothetaskteamintherecentlyheldsteeringcommitteemeeting,andthefeedbackfromCCP,mostoftheactivities initially proposed under the RETF will be undertaken, through the ongoing BETF. These activities includecompetitionassessments,advocacyworkshopsandreviewofregulations/guidelinesetc.

JobsDiagnostic

Theteamhasmadesigni�icantprogressonthefollowinganalyticalactivitiesaimedatdeliveringa'core'JobsDiagnosticanalysisbasedoneasilyaccessibledata:

Demographics and Structural Transformation and Jobs: This analysis examines aggregate trends in employment andproductivityandfactorsbehindGDPpercapitaandlaborproductivitychanges.

Workers and Jobs:This analysisprovides themostup-to-date informationon the supply sideof the labormarket inPakistan.Itlooksatkeylabormarketoutcomesfordifferentpopulationgroups(byage,gender,education,etc.)acrossprovincesandtrendsovertime.Itdescribesthekeycharacteristicsoftheworkingagepopulationwithafocusonyouthandfemaleworkers.Theanalysisalsodelvesintothedeterminantsoflaborforceparticipation,unemployment,employmenttype,andearnings.

FirmsandJobs:ThisanalysiscontainsdetailedtrendsinemploymentbysectorincludingbyprovinceandbygenderusingLaborForceSurveydata.Italsolooksintothecharacteristicsofformalsector�irmsandemploymentinthemanufacturingsector in Punjab using the Census of Manufacturing Industries (2005 and 2011), analyzes and benchmarks labor


productivity and TFP, and discusses the relationship between productivity and employment. Finally, it presents keyconstraints �irms face based on theEnterprise Survey (ES) analysis by province and sector. The team isworkingoncorroboratingtheanalysisbasedonCMIwiththeESdata.

TheteamhasdraftPowerPointsofallanalysisandisworkingonareport,summarizingthekey�indings,whichwillbereadybyendMay/earlyJune.

EconomicEmpowermentofWomen

In order to develop a roadmap to increasewomen empowerment (employment) by eliminating constraints towomenparticipationineconomicactivities,thefollowingactivitywascarriedoutunderthissubtask:

A"CorporateSurveyforUnderstandingDriversofWomenEmploymentinPakistan'wasundertakentounderstandthedriversandinhibitorstowomenemploymentopportunitiesinPakistan.Throughdetailedinterviewsheldwithregisteredprivate �irms, labor contractors and focus group sessionswithwomen employees, the survey report documents thechallengesandgoodcorporatepracticesinPakistan, includingthecontributionsthatwomenmaketothesocietyandorganizations.Thesurveyaimstoenhanceawarenesstogovernmentandthebusinesssectoraboutchallengestowomenemploymentandproviderecommendationsonhowthechallengescanbeaddressed.

Planned Activities

PSERegulatoryandMonitoringFramework

Thefollowingactivitieswillbeundertakenoverthenextsixmonths:

ContinuedsupporttothePunjabFinanceDepartmenttoestimatethecontingentliabilitiesarisingfromtheSOEportfolio.


SupportwillbeprovidedtotheFinanceDepartmenttoestablishamonitoringsystemtooverseethecomplianceofitsPSCswiththeSECPrules.

SupporttoIERUtopublishthenextSOEPerformanceReport.

PSECorporateGovernanceReforms

TheROSConCorporateGovernancewillbecommenced.TheobjectivesofthisROSCareto:

BenchmarkPakistan's corporategovernance frameworkandcompanypracticesagainst theG20/OECDPrinciples forCorporateGovernance.

AssistPakistanindevelopingandimplementingacountryactionplanforimprovinginstitutionalcapacitytostrengthenthecorporategovernanceframework.

Raiseawarenessofgoodcorporategovernancepracticesamongpublicandprivatesectorstakeholders.

ThisROSCwillincludeacomponentonSOE'sandwillreviewthepublicsectorsperformanceincomplyingwiththePSECorporateGovernanceAct(2013).

Cascade(previouslyCapacityBuildingofPC)

Thecascadeapproachwillbeadoptedtofurtherbolsterthedevelopmentobjectiveofthepillar.Theapproachwillfacilitatethecreationofmarketsandaddressconstraints toprivatesectordevelopment through themobilizationof commercial�inancing.Cascadingwillexpandtheoptionsavailabletoclientsfor�inancinganddeliveringondevelopmentgoals.Itwill


promoteef�icientandjustuseofthescarcepublicandconcessionalresourcestocrowd-incommercialcapitalandminimizethepublicdebtburden.

Cascadingwillfurtherthedevelopmentobjectivebyidentifyingactivitieswhichcannotbesponsoredthroughcommercialcapitalduetomarketfailures.Insuchcases,thissubtaskwillbeutilizedtoidentifyreformsnecessarytoaddresssuchfailures.

TheWBGiswellpositionedtoplayaroleincrowding-inprivateinvestment,especiallyForeignDirectInvestmentthroughinvestmentpolicy,legalandregulatoryreformssuchas:

Federallevelreformstopromotenewinvestmentandtradediversi�ication;

Province-speci�icinvestmentclimatereformswithaparticularfocusoninvestmentpoliciesandinvestmentpromotionstrategies;

Regulatoryreformsforeaseofdoingbusinessforlocalandforeign�irmswhichrequireabigpushtowardsincreasingthetransparency, consistencyandpredictability in complianceandenforcementmatters.Regulatorydelivery inPakistanneedstogoonlineusingelectronicsingle-windowsolutions;

Modernization of sectoral policies, laws and regulation to encourage investment into untapped yet promisingopportunitiessuchasintheagribusiness,auto,lightengineering,constructionmaterials,andhomeappliances;and

Pricecontrolsandcompetitionreformstopromoteforeignanddomesticinvestment.

Reformsinitiatedthroughthissubtaskwillhelptoreduceriskstoprivateinvestment,andwillcontributetoopeningupopportunitiesforpublic-privatepartnerships,especiallyforaddressingurbanandindustrialinfrastructuregaps.


PPPDevelopment

Thefollowingactivitieswillbecarriedoutunderthissubtaskinthecoming6-12months:

ContinuedsupporttoSindh.Thissupport,amongstotherareas,willleadtothedevelopmentofStandardOperatingProceduresformanagingPPPFiscalCommitmentandContingentLiabilities(FCCL);ii)buildingcapacityofthePPPsectornodesinProjectSelectionmethodologyandFCCLmatters,andiii)initiatethescopingofguaranteeproductsforthePPPprojectsinSindh.

ContinuedengagementwithKP.ThiswillincludecapacitybuildingandassessmentandshortlistingofthePPPpipeline.ThisengagementwillserveasabridgeandwilleventuallycomplementtheupcomingengagementwiththegovernmentonTourismandPeshawar-TorkhamEconomicCorridorprojects.

Thissubtaskwillalsocontribute to thepipeline InfrastructureFinancing lendingoperationof theWBG.ThepipelineoperationwillhaveaPPPcomponentatthefederallevelwhichisexpectedtobeimplementedthroughthePPPAuthorityandProjectDevelopmentFund.

AssistancetoCCP

TheteamwillbeundertakingmostoftheactivitiesinitiallyproposedtobeundertakenthroughtheRETFundertheon-goingBETF.Thefollowingactivitiesaregoingtobecarriedoutunderthissubtaskoverthenext6months:

Reviewofthenewadoptedmergerregulations.Thisreviewwillimprovetheef�iciencyoftheprocessofmergerreview,includingthecostsavingsassociatedwithmergerreviewfortheCCPandprivatesector.

Designofguidelinesfortheeconomicanalysisofmergers(includingnon-horizontalmergers).ThiswillimprovetheinteractionbetweenthemergingpartiesandtheCCPoutsidethemergerhearingprocess,adjustthetimeallocatedto


mergerreviewaccordingtothecomplexityofthecase,andsupportthesoundeconomicanalysisofmergers.

Guidelines on steps for exemptions authorization. This activity will improve the ef�iciency for exemptionauthorizations,reducecasebacklog,shiftresourcestotheanalysisofmostharmfulanti-competitivepractices

Designingguidelinesformarketinquiries.ThisactivitywillimprovetheeffectivenessofCCPmarketinquiriesthroughthereviewofguidelinesforthecollectionandexaminationofmarketinformation

Draftingguidelinesonpro-competitivedesignoftenders.Thisactivitywillminimizerisksofbidriggingduringthepublicprocurementprocess.TheactivitywillentailclosecoordinationbothwiththeCCPandthePublicProcurementRegulatoryAuthority.

CompetitionAssessmentonTelecomSector.Thetaskteamhascommissionedacompetitionassessmentonthetelecomsector;the�irstdraftofthereportwillbesharedwiththeCCPbyOctober2017.TheobjectiveofthisassignmentistopromoteaframeworkthatwillallowtheCompetitionCommissionofPakistantounderstandmarket-relatedcompetitionconstraintsandidentifypro-activelycompetitionpolicyreformstogetherwiththesectoralregulator.Thisassignmentwillbeguidedbymethodologiestoidentifyregulatorybarrierstocompetition,suchastheMarketsandCompetitionPolicyToolkit(MCPAT).

EconomicEmpowermentofWomen

TheabovementionedcorporatesurveywhichwasundertakentounderstandthedriversofemploymentofwomeninPakistanwillserveasthefoundationforadditionalsectorspeci�icanalysesunderthissubtask.Theseanalyses,tentatively,willcoverselect sectors, includinghighvalue services, retail and apparel. The analyseswill entail a deeperdive into the sectoraldynamicsandpoliciesthatgoverntheparticipationofwomenintheidenti�iedsectors.


JobsDiagnostic

Thefollowingactivitiesareplannedforthenext6months:

Constraintstofemalelaborforceparticipationandaccesstobetterjobs.Theteamwillexpandontheexistinganalysistobetterelaborateonsuchdimensionsashomebasedwork,highwagedifferentialsinthemanufacturingsectors,andrelationshipbetween femaleemployment,household laborsupply,andpoverty (incollaborationwithPovertyGP).Aqualitativeanalysisisbeingundertakentobetterunderstandfemalebarriersandconstraintstoaccesstojobs(next12months).

Household enterprises. The team will �inalize analysis of informal employment and productivity of householdenterpriseswhichemployalargeshareoftheemployed.

Stock-takeofgovernmentprograms.Theteamwillcompletethestock-takingtoidentifyspeci�icareaswheretheWBGcanfocusitsinterventionsintheshorttomediumtermtomaximizeimpactsonjobs.

JobspotentialofICTsector.Theteamwill�inalizeashortnoteestimatingthejobspotentialofICTanddiscussingpoliciestomaximizetheeconomicandsocialimpactofICT.

The abovementioned analyticalwork, coupledwith additional analytical reports,will by the endof next FY lead to thepreparationofanupdated/expandedJobsDiagnosticreportoraseriesofcomplementaryanalyticalandpolicynotes(tobedecided),includingrecommendationsforaJobsStrategytoaddressthejobschallengesidenti�ied.


Tax Policy and Tax Administration Reform

Duration: December 2014- December 2018Program Development ObjectiveIncreased tax collection by at least 2 percentage points of GDP (from 2013/14) and by no less than the average ination rate.

Execution Mode: Bank Executed (BE)

US $7,586,087Allocated Budget as of April 12, 2017:

US $6,078,198Actual + Commitments:

US $1,507,889Available Budget:

US $1,760,028Disbursement: from October 2016 – March 2017:

Expenditure forecasts: April 2017 - September 2017:

The taxation component of the Trust Fund advanced rapidlywith strong client demand during the �irst 22months ofoperations,howeveritisnowatastrategicturningpoint.Aseriesofcomprehensivediagnosticssetsoutdetailedplansforthereformsplannedovertheimplementationperiod.TheWorldBankhassharedwithFederal(FBR)andprovincialauthoritiesinSindhandPunjabkeydeliverablesincludinganICTstrategy,changemanagementprograms,implementationplans,taxauditstrategy,trackandtraceprojectdocument,processmappingandbusinessprocessreengineering,tonameafew.TheWorldBankisnowplacingmoreemphasisonmonitoringtheimplementationofthekeypillarsintheTaxComponent.Theworkprogramisexpectedtoendin2018andthusgoingforward,thechallengeistosustainthereformagendaandsuccessfullyimplementthevariousreforminitiatives.

Overview

BETF: US $1,800,000

RETF: US $4,900,000

Total: US $6,700,000


AdvisoryCommitteeActivities

1. An Advisory Committee comprising representatives from the DFID, the IMF, and the World Bank guidesimplementationof the tax componentof theTAGR.ThisCommitteeprovides strategic adviceandquality controlofimplementationreports.TheAdvisoryCommitteemeetsvirtually,reviewingelectroniccopiesoftheimplementationreportandrelatedannexes,andprovidestechnicalrecommendationsandadvicetotheteamontheworkprogram.InFebruary,therewasameetingoftheACinIslamabadwheretheWBmadeapresentationonprogressmadeinimplementingthetaxpillarofTAGR.Inthismeeting,itwasdiscussedtoputinplaceanewresultsframeworkforthetaxpillarwhilemaintainingthePDO.AnewresultsframeworkhasbeensharedwithFBRtoreceiveitsinputs.

Implementation Performance and Achievements as of April 2017

Strongclientdemanddroverapidimplementationinthe22monthsofTAGRoperations,ledbyaseriesofdiagnosticreports.ApreliminaryfunctionalreviewofFBRfedintotheworkplanandstrategyforsubsequentactivities.Followingthefunctionalreview,Key Performance Indicators (KPIs)were drafted tomeasure ongoing FBRperformance andwere subsequentlyintegratedintoFBR'sapplications.AcostedITstrategicplanwasdevelopedandapprovedbyFBRinDecember2016.AprocessmappingofkeytaxfunctionswasdevelopedandtheassociatedrecommendationsintegratedintotheoverallITreformplan.Onaudit,mentoring,training,andstudytourswereintensi�iedandworkisunderwaytointroducerisk-basedaudit frameworksat the federalandprovincial levels. InPunjab,anassessmentof the ICT infrastructure for thePunjabRevenueAuthoritywasconducted.Also,draftsofanalyticalstudies(onGeneralSalesTax,UrbanImmoveablePropertytax,transactiontaxes,AgricultureIncomeTaxandprofessionaltax)wereproduced.InSindh,theWorldBankcompletedtheICTassessmentofSRBinMarch2017thatincludedaremediationplanwithactions,andearlier,inDecember2016,submittedadraftpropertytaxstudy.AsummaryoftheseactivitiesispresentedinTable1below:


Table 1: Summary of FY 2015-17 Activities (as of April 2017)

TaxPolicy–Buildinganalyticalcapacitytoimprovethequalityofthetaxsystemandinformthebudgetprocesswithrealisticrevenuetargets.

Federal Board of Revenue

TaxPolicySupportedbyTAGRResearch

Duringthepreviousreportingperiod,signi�icantanalyticalworkwascompletedtoinformpolicymakers.Astudyoncapitalgainstaxrevealedthatsystematicundervaluationandexemptionsoncapitalgainsonpropertiesheldfortwoyearsledtosigni�icanttaxlosses.

Toaddresstheseproblems,theMinistryofFinanceandtheFBRdesignednewpolicymeasurestoestablishanimprovedvaluationmodelandtoextendtheholdingtimerequiredforpropertytaxexemption.Duringthereportingperiod,thesecapital gains provisions were included in the 2016-17 budget. Implementation of the new measures is currentlyunderway.

Theabove-mentionedRETFincludessupporttotheestablishmentofataxintelligence/marketintelligenceunitwhichisexpected toproduceanalyticalworkonrevenue forecasting, taxexpenditure, and taxcompliancegap.TheWBwillsupportthisinitiativebyreplicatingsimilarworkthatisbeingconductedinPunjab.

TaxAdministration–Strengtheningcoretaxadminoperationstoimprovecontrol&facilitatecompliance

KPIsandManagementInformationSystem(MIS)

Asacontinuationofthefunctionalreviewcompletedduringthepreviousreportingperiod,asetofpreliminarystrategic-levelKPIstomeasurecriticalsuccessfactorsandtoevaluateperformancewereidenti�iedanddevelopedandanMISto


monitorthem. TheMISwasdeliveredanddiscussedinSeptember2016andsoonafterinstalledanddeployedinFBRserverswiththeassistanceofPRALpersonnel.Moreover,theBankprovidedalistofrecommendationsincludingtheset-upofasmallteamwithinFBRtomanagetheKPItask,thelaunchofapilotprocesswithasetofstrategicindicators,andtheimitationofthepilot.

InDecember2016,theFBRdecidedtointegratetheKPIstoolintotheirownapplications,developinganewintegratedmodule using the provided KPIs model. Screening sessions were coordinated to share some key details and newrecommendationswereprovided.

ProcessMappingoftaxfunctions

Aprocessmappingexercisecoveringkeytaxfunctionswascompletedwiththeaimofassessingtheexistingbaselineandidentifyingrecommendationstosimplifyproceduresandimproveproductivityineacharea.ThisiscriticalpriortotheimplementationofnewICTsystems.Toreviewtheprocedures,theteamheldmeetingswithauthoritiesandtechnicalstaffatFBRHeadquarters,PRALandwithRTOIslamabad.Theprocessmappingcoversthefollowingfunctions:TaxpayerRegistration,BroadeningtheTaxBase,ReturnProcessing,Stop-FilingControl,PaymentProcessing,Withholdingtaxcontrol, Refund processing, Tax Arrears, VAT Refund, and Audit. Recommendations were evaluated according tocomplexityandimpacttoprioritizeanddeducequick-wins.TherecommendationsweresummarizedandcommunicatedtoFBR,whichinearly2017integratedtheprocessmappingrecommendationsintoitsoverallITActionPlan.

TaxAudit

ThetrainingprogramstartedinNovember2015.Fiveworkshops–onbasicaudittechniques-werecompletedbyJune2016,andfourworkshopsconductedbetweenOctober2016andJanuary2017.Anewthree-dayworkshoponcomputerassistedaudittechniqueswasheldinMarch2017.TAGRseekstoestablishapermanentstructurefortaxaudittrainingwithastrongfocusonforensicaudittechniques.Additionally,TAGRhasprovidedmentoringoftaxauditorsonforensicauditandsupportedthereviewoftaxauditregulations,developmentofariskassessmentframeworkfortaxauditwingandtheelaborationoftaxauditpolicies.ThementoringactivitycoveredRTOsandLTUsacrossthecountry(Islamabad,


Rawalpindi, Lahore, and Karachi). The activity resumed in October 2016with a �irstmission covering the LTU inIslamabad.SubsequentmentoringmissionswereconductedinNovemberandDecember2016,andinFebruaryandMarch2017.TwomoremissionsareplannedforApril(LTU),andMay(RTO)2017.49LTUcasesand61RTOcaseswereselectedbasedonspeci�iccriteria(high-sector, importantsector,etc.)andcompletedunderthesupervisionofBankexperts.Initialresultsisrecordedtodate.Forinstance,intheLTUs,17caseswere�inalizedgeneratinganadditionalrevenueofapproximately4.3billionRps.Similarly,22caseswere�inalizedattheRTOsgeneratinganadditional404millionRpsandanextra1.7billionidenti�iedaspotentialrevenues.

To complement the training and thementoring, onestudy tour covering audit techniques, risk-based frameworks,computer-assistedsolutions,andoperations,wasconductedbetweenApril3and7,2017.Fourteenof�icersfromFBR(andonefromPunjabRevenueAuthority)visitedLebanonwheretheywerehostedbytheLebanesetaxAdministration.The tourwas interactive, an eye opener, and a great learning experience for the participants. Another study tour,specializedinrisk-basedframeworks,isplannedforMay28-June2,2017whereaboutsevenmiddleandtopmanagementof�icerswillvisittheAustralianTaxAdministration.

AdetailedauditdiagnosticwasdraftedandsubmittedinDecember2016.ThereportbuildsontheFBRfunctionalreview and the processmapping exercise with the objective of identifying performance gaps, key challenges, andcorrective measures. The diagnostic examines the institutional and legal frameworks, operations, and the overallcomplianceriskmanagementframework.

TohelpFBRmovetowardsarisk-basedauditframework,aroadmapandastrategyguidingdocumentwerealsoproducedandsharedwithFBR,respectivelyinFebruaryandApril2017.Theroadmapoutlinesthekeystepsrequired,theowner,andtheexpectedtimeframe.The�irststepistodeveloparisk-basedstrategy,andassuch,aguidingdocumentwasdevelopedtoguideFBRinoutliningthestrategy.Thedocumentcoverswhatthestrategyentails–fromvisionandmissiontoobjectivesandassociatedmeasures–andoutlinesthekeyparametersandquestionsFBRneedstoconsiderwhiledraftingitsstrategy.


ICTSystems–Automationtofacilitatecompliance,improveaccesstoinformation,supportef�icientprocessingoftaxpayer�ilingsandincreaseaccountability.

BuildingonacomprehensiveITstrategicplan,theTAGRconductedafunctionalreviewoftheIRISsystemwhichistheintegratedrevenuesystemthatissupportingFBRbusinessesprocesses.ThereviewwascarriedoutinSeptemberandOctober2016andkey�indingsandrecommendationscommunicatedtoFBR.KeyrecommendationswithregardstoIRISwereprovidedandstaggeredoverathree-yeartimeframe.ThelistofrecommendationsforthecomingyearincludesthecreationofanArchitecturetaskforce,theimplementationofaqualityassurancereviewandanoperationalfeedbackmechanism,thecompletionofthefunctionalityoftaxarrearsmanagementfortheincometaxsystem.

AttheendofNovember2016,discussionsessionswerecoordinatedtoreceivecommentsonthefunctionalreviewoftheIRISsystem.Themeetingsfocusedontheresponsibilitiesofanewarchitectureworkforce,theprocessforimplementingaqualityassurancereviewandanoperationalfeedbackmechanism,andthevisionofcompletingnewfunctionalitiesforsystems.

InJanuaryandFebruary2017,aseriesofvisitswereorganizedtoreviewprogressmadebytheITWingoftheFBRwithrespect to theActionPlanoriginallydeveloped in threephases (including theprogressofPRAL).The statusof theimplementationoftheoriginalActionPlan(132actions)wasreviewedand24(18%)wereconsideredaseitherdoneorobsolete,34(26%)areinprogressandactivelybeingworkedonbytheFBRorPRALand74(56%)arestillpending.TheFBRapprovedanICTStrategicPlaninlateDecemberof2016andaconsolidatedlistofactionsfromtheActionPlanandtheStrategicPlanwaspreparedbytheWorldBankteam.Inaddition, inclosecollaborationwiththeFRBChiefInformationTechnology,anupdateddocumentwasprepared,called“ImplementationplanfortheStrategicPlan”asanamendment to the current strategic plan that details how it will be implemented (including some processmapping/reengineeringactions).


Punjab Province

Bene�iciaryinstitutions: FinanceDepartment,PunjabRevenueAuthority(PRA),BoardofRevenue(BoR),andExciseandTaxationDepartment(ETD).

FinanceDepartment(TaxReformsUnit(TRU): Regularmentoringandon-the-jobtraininginrevenueanalysishasbeen provided to TRU staff. TheUnit has produced quarterly, bi-annual, and annual revenue reports. TRU is alsoproviding support in budget making, revenuemobilization committeemeetings, and for high-level discussions onrevenuemeasureswithfederalandotherprovincialgovernments.

In-depthstudiesonselectedtaxesandnon-taxes(forPRA,BoRandETD):The�irstdraftsofanalyticalstudiesonGeneralSalesTax,UrbanImmoveablePropertytax,transactiontaxes,AgricultureIncomeTaxandprofessionaltaxhavebeensharedwiththeauthoritiesforcomments.Theobjectiveofthesestudiesistoanalyzepotentialinthesetaxes,andsuggestnecessarypolicyandadministrationreformstoachievethatpotential. ThesestudieswillbecompletedbytheendofFY2017.Also,areviewofselectednon-taxrevenuesourcesandminortaxesisbeingconducted.Theseandotheranalyticalstudieswillinformtherevenuemobilizationstrategyandroadmap/implementationplanoftheprovincethatwasdevelopedwiththesupportoftheWorldBank.

PRA:StrengtheningAdministration-AfunctionalreviewofthePRAwascompletedin2016,assessingthestrengthsandweaknessesofthePRAtoguideinterventionsoverthemediumtolongterm.Ahumanresourcesmanual,auditmanual,andtaxlitigationmanualwerealsodeveloped.

ICT - The ICT assessment of PRAhas been completed that includes a remediation planwith actions that PRA canundertaketoaddressrelatedchallenges.Overfouryears,theplancallsforauni�iedcurrentaccount,theroll-outofacasemanagementsystem,theestablishmentofariskmanagementsystem,andtheimplementationofatrainingandHRdevelopmentplanforIT.


DuringJanuaryandFebruary2017thestatusofthe implementationoftherecommendations(presentedintheICTAssessmentreport)wasreviewed.Thefollowingwerethemain�indingsofthereview:(i)therehasbeennoprogresswithrespecttotheoriginalactionplanrecommendedonOctoberof2016,and(ii)thecontractualrelationshipwithPRALhasnotimprovedandtherearestillfundamentaldifferencesbetweenPRAandPRALastotheexpectedservicelevelstobeprovided.HencetheWorldBankteam,incoordinationwithITDirector,preparedtheoutlineofastrategicplananddocumentedtheITVisionthatwastransmittedtotheteambythedifferentPRAMembersinterviews.

Audit-TrainingsintaxauditmethodsandtechniqueswereprovidedinAugustandSeptember2015and2016.InOctober2016,theauditpolicydocumentandtheauditmanualsforauditorsandauditmanagerswere�inalized.Inaddition,theBankprovidedadviceonatrainingprogramandonarisk-basedsystemtoselecttaxpayersforaudit.ThedeliverablesincludedamendmentstothePunjabSalesTaxonServiceActanditsRules(2012),aproposalforatrainingplanonVATAudit,andadiscussiondocumentonrisk-basedauditselection.

BoRandETD:AninternationalpropertytaxworkshopwasconductedtogatherideasonreformstopropertytaxinApril/May2016inLahore.Differentinternationalgoodpracticesinpropertytaxweresharedduringtheworkshop.AninternationalvisitwasorganizedforETDof�icialstostudyUK'spropertytaxsystems(BradfordandBelfast)inFebruary2017.Aworkshopwas also conductedwith theof�icials ofBoR inMarch2017 todiscussAIT reforms and relatedchallenges.Thediscussioninformedtheanalysisunderthemainstudy.

Otherareas:SupportwasalsoprovidedinorganizingPunjabTaxDayeventsonApril10,2017,bysharingconceptnoteforkeyawarenessraisingactivities,andparticipationof internationalexpertaspanelist/discussant. Inaddition, incollaborationwithIFCteam,provincialleveldiscussionsessionswereheldinApril2016(nextoneplannedforJuly2017)onreformstoimproveDoingBusiness-PayingTaxesindicator.


Sindh Province

Bene�iciaryInstitutions:FinanceDepartment,SindhRevenueBoard(SRB),BoardofRevenue(BoR),andExciseandTaxationDepartment(ETD).

FinanceDepartment:BuildinganalyticalCapacity–TheBankteamhelddiscussionswiththeBureauofStatisticsandFinanceDepartmentinprovidingsupporttodeveloptheircapacityinestimatingprovincialmacroeconomicindicators,andconductingrevenueanalysis(forecasting,potentialanalysis,expenditureandgapanalysisetc.)–formoreinformeddecisionmaking.RelatedsupportwillbeprovidedaftertheestablishmentoftheTaxReformUnitinFY17.

SRB:Capacitybuilding–Aninternationalworkshopwasconductedonsubnationaltaxationwithparticipationfromotherprovincesaswell.ItmainlyfocusedonGSTandpropertytaxes.Also,internationalvisitswerearrangedtostudysalestaxadministrationofIndiaandpropertytaxadministrationofUK(BradfordandBelfast,February2017).Moreover,trainingshavebeenprovidedtostaffinbasicauditskillsandtechniquesin2015and2016.

ICTStrategy–InMarch2017,theWorldBankcompletedtheICTassessmentofSRBthatincludedaremediationplanwithactionsthatSRBcanundertaketoaddressurgentchallenges.Theareaswithopportunitiestobeimprovedare:StrategicThinking,ITGovernance,ProcessManagement,SoftwareEngineering,HRdevelopmentandtraining.

HRassessmentandaudit–Arisk-basedauditmodelhasbeenfordeveloped,whichisbeingadaptedforSRB.Thiswillbecomplimentedbytrainingonarisk-basedsystemtoselecttaxpayersforaudit. Further,theHRassessmentofSRBisbeingconducted,whichwillhelpinformitsHRstrategy,HRmanualandtrainingplan.

BoRandETD:Propertytaxstudy–The�irstdraftofthestudywassubmittedinDecember2016.Thestudyhighlightsthekeyproblemsofunderassessment,anincompletevaluationroll,andlackofautomation,andmakesrecommendationsforimprovementinthelaw,valuationandtheadministrationoftax.


AgriculturalIncomeTax–TheBankteamhasinitiatedthedatacollectionforestimatingthepotentialforAITinSindhandrelatedreforms.Theteamdiscussedthescopeofworkwithauthoritiesandconducted�ieldvisitsduringJanuary2017.

Stamptax–TheToRsforastudyonreformingtheStampTaxhavebeen�inalized,coveringarangeofadministrationmeasuresrelatedtobusinessprocesses,includingIT,onlineapplication,anddocumentmanagement.Thestudyispartofplanfornext�iscalyear.


Project Outcomes – As of April 2017

2. In its22monthsof implementation, signi�icantprogress towards the results frameworkoutcomeshasbeenachieved.Taxcollectiontargetsaregrowinginlinewiththe�inaloutcomeobjective,althoughfurthergainsarelikelytorequiremoredif�icultadministrativeimprovementsgoingforward.Thecontextandassumptionsprovidedintheconceptnoteforthisprojectremainvalid,andthedesigncontinuestoberelevanttothechallengesfacingauthorities.Progresshasbeenmadeagainstallintermediateoutcomes,assummarizedinTable2.

Table 2: Progress towards Results Framework Indicators

Final Outcome Increasedtaxcollectionbyatleast2percentagepointsofGDP(from2013/14)andnolessthantheaverageannualin�lationrate.

Ontrack.Baseline2013-14:10.5%ofGDP.Projectionfor2016-17:12.9%ofGDP.

Intermediate Outcomes

EliminationofSROsgrantingconcessionarytaxexemptions.

Achieved.LegislationwaspassedpermanentlylimitingtheissuanceofSROs.

Taxexpenditurereducedbyatleast0.5%ofGDP.

Achieved.Thegovernmenthaseliminatedtaxconcessionsandexemptionsamountingtoabout0.9percentofGDPsince2014.

MDTF-AGR OCTOBER 2016 - MARCH 2017IMF12thReviewundertheExtendedArrangement,Table6b.2

2

Progress as of April 2017

41

https://www.imf.org/external/pubs/ft/scr/2016/cr16207.pdf

http://www.oecd-ilibrary.org/governance/g20-oecd-principles-of-corporate-governance-2015_9789264236882-en

https://www.imf.org/external/pubs/ft/scr/2016/cr16207.pdf

Increaseinnumberofactivetaxpayersbynolessthan5%perannum.

Notachieved.

2013-14Registeredtaxpayers: 3,660,441Taxreturns�iled: 1,078,124Taxpayments: 2,423,618,455,983

2014-15Registeredtaxpayers: 3,801,918Tax�ilings: 1,103,888Taxpayments: 2,639,346,712,995

Activetaxpayersroseby2.3%.Revenuesroseby8.9%.

Annualballot-basedauditsupfrom0%to15%

Indicatoradjusted.TheTAGRissupportingtheshiftfromballot-basedauditstorisk-basedaudit–aninternationalgoodpractice.TheDPCtargetis40risk-basedauditsoflargetaxpayers.In2017,riskparameterswereintroducedbyFBRandcasesselectedaccordingly.Afullrisk-basedmodelisinthedesignstage

IncreasedintegrationofFBRITsoftware.

Ontrack.TheFBRhasanICTStrategicPlanapprovedandalltheactionswillbemonitoredfollowingthe“ImplementationplanfortheStrategicPlan”thatdetailshowitwillbeimplemented.


Project Outlook – Year 2

3. While the 22 months of implementation indicates encouraging progress, the project continues to faceimplementation risks, particularly client staff turnover. The Federal and Provincial Boards of Revenue continue toexperienceahighturnoverrateofseniormanagement.Forinstance,twoFBRChairmanassumedof�iceduringthisreportingperiod,andkeyFBRcounterparts(MemberITandMemberAudit)wereeitherreplacedorretiredbetweenMarchandApril2017.Thisturnovercomplicatestheimplementationofworkplansagreedwithpreviousleaders,andrequiresadditionaltechnicalassistanceengagementstoreviewandadjustplansaccordingly.TheturnoverisprovingtobeanobstacleformovingtoamediumtermrevenuestrategyforFBR.

4.Progressachievedoverthepastyearisencouraging,however,sustainingthismomentumcontinuestocallfortimely investmentof resourcesandcontinuedengagementwith taxauthorities.Technicalassistancehas inherentlimitations;itcanprovidetechnicaladvice,deepanalysisofcorebusinessareas,andguidancebasedoninternationalgoodpractices.However,successdependsontheownershipandcommitmentofauthoritiestoimplementreforms.Theincreasesinrevenueachievedthroughpolicyactionprovideencouragingmomentum.Tosustainthiseffort,considerationshouldbegiventoexploreinstrumentstoinformcurrentinvestmentneedsintermsofadministrativecapacityinICTandHumanResources.

Planned Activities

5.Atthefederallevel,plannedactivitieswillfocusonanumberoftasksintaxpolicy,ICTandaudit.Belowisalistofactivitiesplannedfortheupcomingperiod.Missionsaresubjecttocon�irmationwiththeclientandmaybeadjusted.TheWBwillalsosupporttheimplementationofthetaxintelligence/marketintelligenceunitincludedintheRETFthroughadviceonrevenueanalysisandtaxcompliancegapestimates.


Audit

April2017:MentoringofLTUsinKarachi,Lahore,Islamabad(lastvisitthiscycle)May2017:MentoringofRTOsinKarachi,Lahore,Islamabad,andRawalpindi(lastvisitthiscycle)May–June2017:StudyTourtoAustraliaonrisk-basedauditframeworkSeptember/October2017:SecondStudytouronbasicaudittechniquesSeptember/October2017:Resumptionofnewmentoringmissions(newcases)andpossibleresumptionofCAATtrainingworkshops

6.Attheprovinciallevel,theteamwillcontinuetosupportpartnersinPunjabandSindhwithrevenuepolicyandadministrationreforms.Theseactivitiesareplannedtotakeplacethroughoutthenextreportingperiod(anduntilFY18).Plannedactivitiesinclude:

April2017:ConsolidationoftheImplementationplanfortheStrategicPlanwithFBR/PRAL.Apr-May2017:DiscussionandfeedbackonICTassessmentwithSRBMay2017:MonitoringandworkshopswithFBR/PRALJune2017:Monitoringandworkshops-FBR/PRALJune2017:HRassessmentinSRBJuly2017:Monitoringandworkshops-FBR/PRALAugust2017:Monitoringandworkshops-FBR/PRALJun-Jul2017:SupportonICTStrategy–SRB

ICT

FinanceDepartment(TaxReformsUnit;TRU)

Analyticalwork:Reviewofminorornuisance taxesandnon-tax revenues (completing the report); reviewof currentrevenuemonitoringandreportingmechanismtosuggestimprovements;andassessmentoftaxburden(fromtaxpayerperspective).


Developconceptnotefor�ieldexperimentationtohelpimprovevoluntarycompliance. Allthesestudieswillinform(andhelpupdate)themedium-termroadmapforrevenuemobilization.

Capacitybuilding:trainingonrevenueanalysisandforecastingtechniquesforTRUandallprovincialrevenuebodies;andrelevantint'lstudytours.

Taxpayers'awareness:supportconductingPunjabTaxDayeventsonApril10th.

PunjabRevenueAuthority(PRA)

Audit:Support in adapting the risk-basedauditmodel forPRAandproviding trainingson risk-based system to selecttaxpayersforaudit(includingdeskaudit).

Surveys: Provide technical guidance on methodology for designing surveys (tax base assessment survey and citizensatisfactionsurvey).

Taxlitigation:Developingcase-studiesbasedtrainingprogramontaxlitigationandproviderelatedtrainings.

Otherareas:DevelopingstrategyforPRA,includingde�iningKPIsandM&Eframework

ExciseandTaxationdepartment(ETD)

Nationalworkshoponinter-provincialcoordinationonMotorVehicleTaxStudytoanalyzepotentialinmotorvehicletaxandrelatedreforms


BusinessprocessmappingofETD

HRassessmenttoinformHRstrategyanddeveloptrainingprogram

BoardofRevenue(BOR)

Functionalreviewoftheorganizationforitsmodernization(incl.strategic,HRandITassessments)

SupportdevelopmentofHRmanualsandtrainingplans

Sindh

FinanceDepartment(TaxReformsUnit;TRU)

Revenueanalysis:conductingstudiesonGST,transactiontaxes,motorvehicletax,non-taxrevenuesandminortaxes–toinformrelatedreforms.Duringtheongoing�iscalyear,theteamwillcompletethestudyonAgricultureincometax.

Capacitybuilding:AftertheestablishmentofTRU,on-the-jobmentoringandtrainingwillbeprovidedonrevenueanalysis(forecasting,potential,expenditure,andgapanalysis–combinedwithPunjab).Studytourswillbeorganized,togetherwithPunjab.

The assessment of tax burden, and concept note for �ield experimentation to improve voluntary compliance will bedevelopedincollaborationwiththeTRU.


SindhRevenueBoard(SRB)andExciseandTaxationDepartment(ETD)

Audit:Support inadapting the risk-basedauditmodel forPRAandproviding trainingsonrisk-basedsystemtoselecttaxpayersforaudit(includingdeskaudit).

HRassessment:completetheHRassessmenttoinformHRstrategyandmanual,anddevelop(orupdate)trainingplan.

Supportindesigningthesurveyforprofessionstax(ETD)

DoingBusiness–PayingTaxes(forLahoreandKarachi):Conductnational-levelworkshopwithallstakeholderstodiscussstrategiestoimprovePakistan'srankingonPayingTaxesindicator.


MDTF-AGR Secretariat Serena Business Complex Sector G-5/1. Khayaban-e-SuhrawardyIslamabad,

AGR

www.mdt fagr.org

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