ISLAMABAD, November 10, 2026: Pakistan has decided to proceed with a $1.7 billion multi-phase financing programme from the World Bank to expand the tax base, improve public spending efficiency and strengthen fiscal management across federal and provincial governments, despite slower-than-expected implementation of initial reforms.
According to World Bank documents cited in a media report, the financing package falls under the Public Resources for Inclusive Development programme, which aims to improve revenue mobilisation, public expenditure management and government data systems.
The programme follows the World Bank’s Multi-Phase Programmatic Approach (MPA), allowing financing to be provided in stages as participating governments implement agreed reforms.
Of the proposed $1.7 billion package, $700 million has already been approved for the first phase, including $600 million for the federal government and $100 million for Sindh.
The federal government secured approval for its $600 million financing component in December 2025.
However, implementation has progressed more slowly than initially anticipated, with the World Bank assigning a “Moderately Satisfactory” rating to the programme in successive implementation reports.
An April 2026 assessment noted that although financing had been approved on December 19, 2025, implementation had not yet begun.
A subsequent report issued in October maintained the same performance rating but acknowledged improvements in programme execution.
According to the documents, the financing became effective on May 14, 2026, while an advance disbursement of $164.5 million was made on June 29.
The next phase of the programme involves a proposed $200 million financing package for Khyber Pakhtunkhwa, while Balochistan and Punjab are expected to participate in subsequent phases.
The World Bank programme focuses on three major reform priorities: increasing tax revenue, improving the allocation and efficiency of public expenditure, and strengthening financial and public service data systems.
A central component involves expanding the tax base through more effective taxation of agricultural income and improvements in property tax collection.
The proposed reforms also include digitising land records and introducing more consistent property valuation systems to improve transparency and revenue administration.
The programme seeks to align public spending responsibilities with the constitutional distribution of powers between federal and provincial governments.
Improved coordination between different levels of government is expected to support more efficient resource allocation and strengthen the delivery of public services.
Despite implementation challenges during the initial phase, Pakistan has decided to continue pursuing the remaining financing under the programme.
The proposed financing reflects ongoing efforts to strengthen fiscal sustainability through tax administration reforms, expenditure management and improvements in government financial systems.
Further disbursements and programme expansion will depend on the World Bank’s approval processes and progress toward the agreed reform objectives.