ISLAMABAD: The federal government has approved a concept proposal for a $200 million World Bank-funded reform programme in Khyber Pakhtunkhwa. The five-year initiative will strengthen provincial tax collection, improve public spending and upgrade statistical systems. It will run until October 2031.
According to the concept paper cleared on October 23, the programme, titled Public Resources for Inclusive Development, will receive a $200 million loan from the World Bank’s International Development Association (IDA). The funding includes $180 million for implementation and $20 million for technical assistance.
The programme will focus on three areas: revenue mobilisation, public expenditure efficiency and accountability, and better statistical data for policymaking.
Under the revenue component, the provincial government will expand the tax base, introduce risk-based audits and strengthen compliance systems. It will also update property valuation tables and review tax exemptions. The KP Revenue Authority, Board of Revenue, Excise and Taxation Department, and Mines and Minerals Department will lead these reforms.
Meanwhile, the public expenditure component will improve budget allocation and spending in the health and education sectors. The government will prioritise timely releases of non-salary funds to schools and primary healthcare facilities. It will also promote digital payments, strengthen internal financial controls and improve accountability for public funds.
The third component will support the KP Bureau of Statistics. It will improve the collection, integration and publication of provincial data. These measures will help officials prepare budgets, make policy decisions and monitor development progress.
During the first 12 to 18 months, the programme aims to introduce risk-based tax audits and establish a unified property valuation framework. It also seeks to ensure timely operational funding for public facilities and integrate monitoring of key human development indicators.
By October 2031, the initiative aims to raise provincial own-source revenue, improve taxpayer compliance and make education and primary healthcare spending more predictable and efficient.
The programme builds on earlier World Bank-supported public finance reforms in the province. In December 2017, the Central Development Working Party approved the $118 million KP Revenue Mobilisation and Public Resource Management Programme. That initiative included $100 million in results-based financing and $18 million in investment project financing. Its implementation was scheduled to continue through June 2026.
Similarly, Khyber Pakhtunkhwa implemented the Khyber Pakhtunkhwa Spending Effectively for Enhanced Development programme to strengthen public financial management. That initiative was also scheduled to run through June 2026.
