Pakistan Moves to Secure $200m ADB Loan for FBR Digital Reforms
ISLAMABAD, PAKISTAN — WEB DESK: Pakistan is moving ahead with another $200 million foreign loan to reform the Federal Board of Revenue and accelerate the digitalisation of the country’s tax administration, potentially taking total foreign financing obtained for tax-system modernisation to around $4.9 billion.
The Central Development Working Party (CDWP) has recommended the Transforming and Digitalising Revenue Administration (TADRA) project, valued at Rs57.1 billion, for approval, according to the Ministry of Planning. The proposal has now been forwarded to the Executive Committee of the National Economic Council (ECNEC) for further consideration and final approval.
The project is expected to be financed through a $200 million loan from the Asian Development Bank (ADB). This is an important distinction: the CDWP has recommended the project, while ECNEC approval remains pending.
Around $81 million — approximately Rs22.5 billion — is planned for consultancy services over five years, according to the project details reported from government records.
Planning Commission records cited in the report show that Pakistan has already obtained approximately $4.7 billion from various development partners for tax-system reforms. The proposed new financing would raise the cumulative amount to roughly $4.9 billion.
The Planning Commission has also called on the FBR to conduct a comprehensive assessment of previous foreign-funded reform programmes, including the Tax Administration and Reforms Project, Pakistan Single Window, Integrated Transit Trade Management System and Pakistan Raises Revenue programme.
The scrutiny is significant because earlier tax-reform programmes also set ambitious targets for improving Pakistan’s tax-to-GDP ratio, but some of those goals were not achieved.
Planning Minister and Deputy Chairman of the Planning Commission Ahsan Iqbal stressed the need for clear and measurable outcomes, particularly in revenue generation, expansion of the tax base and improvement in the tax-to-GDP ratio.
Under the proposed project, the FBR has set a target to raise Pakistan’s tax-to-GDP ratio from 10.3% to 13.5% by 2029. It also aims to expand the number of active registered taxpayers from approximately 7 million to 12 million.
The broader objective is to implement the FBR’s 2024–28 Transformation Plan and move revenue administration towards an increasingly digital, integrated and data-driven model. The government’s transformation agenda includes upgrades to hardware and software, digital monitoring and automated tax systems.
The FBR’s digitalisation push is already underway. Prime Minister Shehbaz Sharif was briefed in August that work was progressing on IRIS 3.0, a central data hub, automated taxation and the use of artificial intelligence and machine learning to improve tax collection.
Official National Assembly material also confirms that FBR reforms include a National Faceless Audit Wing, National Assessment Wing, third-party data, digital invoicing and an AI-supported Central Data Hub for compliance and risk assessment.
The proposed $200 million financing will therefore be closely watched not only for its impact on revenue collection but also for whether measurable improvements justify Pakistan’s growing reliance on foreign-funded tax reform programmes.
