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Islamabad: The World Bank urged the government to speed up the execution of policy actions under its $20 billion economic reform partnership aimed at harmonising sales tax, provincial agriculture and property taxes, and removing regulatory barriers to stimulate growth, revenue generation, and trade and investment facilitation. The World Bank launched the 10-year country partnership framework, with an estimated $20bn blended financing, involving concessionary and commercial lending. The partnership's implementation phase is now underway.

On Friday, a World Bank delegation, headed by its country director Bolormaa Amgaabazar, met with Finance Minister Muhammad Aurangzeb to evaluate progress on the economic reform partnership. The delegation discussed implementation priorities across various sectors, such as growth, jobs, fiscal management, revenue mobilisation, capital-market development, trade and investment, and institutional reforms.

The meeting reviewed the World Bank's support for Pakistan's broader economic reform agenda, focusing on translating reform priorities into actionable steps and enhancing coordination among relevant ministries, provincial governments, and implementing agencies. Both parties agreed to shift from reform design to effective implementation, emphasising practical measures that could bring tangible improvements in economic activity, investment, employment, and the overall business environment.

The World Bank highlighted proposed measures, including a growth and jobs operation designed to improve the investment climate, access to finance, sectoral productivity, and labour-market outcomes. Discussions also centred on reforms to bolster the Prime Minister’s Access to Finance initiative, such as a unified insolvency framework, factoring legislation, and regulations to support SME financing, as well as measures to expand commercial financing and enhance private-sector participation.

The finance minister and the World Bank delegation reviewed the implementation of the National Tariff Policy and ongoing analytical support for tariff reforms, focusing on competitiveness, productivity, investment, exports, and Pakistan's integration into global value chains.

Progress on fiscal and revenue reforms, including tax-policy capacity strengthening, was discussed. The meeting also reviewed the harmonisation of general sales tax, better federal-provincial coordination, and stronger data-sharing arrangements. Further discussions focused on agricultural income tax reforms, including amended provincial laws and rules, digital registration, filing, and payment systems, and enhancing compliance and data sharing between federal and provincial governments.

The World Bank also discussed provincial property-tax reforms, aiming to improve valuation approaches, strengthen digital systems, and transition towards market-based valuation frameworks. Discussions on domestic capital markets included support for developing a roadmap for capital-market reforms, deepening domestic capital markets, expanding financing avenues, and reinforcing the investment and capital formation ecosystem.

The finance minister underscored the need to bolster debt-management capacity and domestic bond markets, covering technical cooperation on managing market risks, developing domestic bond markets, and strengthening investor-relations capacity.