Asian Development Bank proposes $200 million for Pakistan tax reforms

The Asian Development Bank (ADB) has proposed an additional $200 million in financing to assist Pakistan in modernizing its revenue administration. The funding is part of the ‘Transforming and Digitalising Revenue Administration Project’ and is intended to support the Federal Board of Revenue (FBR) in its digital transformation efforts.

According to ADB Vice President Yingming Yang, the project aims to implement advanced technology, including artificial intelligence, data analytics, and improved cybersecurity, to enhance tax and customs systems. The initiative seeks to build a more efficient, technology-driven revenue system to improve taxpayer information management and compliance.

In addition to the financial support, the ADB has urged Pakistan to broaden its narrow tax base and reduce exemptions to improve fiscal sustainability. Strengthening domestic revenue collection is viewed as a critical step for Pakistan to enhance its capacity for public investment and reduce its reliance on external debt and international financing.