The federal government has approved a concept proposal for a $200 million World Bank-funded reform programme aimed at improving tax collection, public expenditure management and statistical systems in Khyber Pakhtunkhwa (KP). The five-year initiative, known as the Public Resources for Inclusive Development programme, is scheduled to run until October 2031. According to a report by The News, the concept paper was cleared on October 23, setting out a reform framework focused on strengthening the province’s ability to generate revenue, manage public funds and use reliable data for policymaking.
The programme will be financed through a $200 million loan from the World Bank’s International Development Association (IDA). Of the total financing, $180 million has been allocated for programme implementation, while the remaining $20 million will support technical assistance. The initiative is structured around three main areas: provincial revenue mobilisation, more efficient and accountable public expenditure, and improved availability of statistical information. These areas are intended to support provincial financial management and improve the link between public resources, government services and development planning.
The revenue mobilisation component will focus on expanding the provincial tax base and strengthening compliance systems. Planned measures include introducing risk-based tax audits, updating property valuation tables and reviewing tax exemptions to make the revenue framework more effective. The reforms will involve several provincial departments and institutions, including the KP Revenue Authority, Board of Revenue, Excise and Taxation Department, and Mines and Minerals Department. Their participation is expected to support coordination across different revenue sources and improve the administration of taxes and related collections.
Risk-based audits are among the measures planned to improve the identification of compliance issues and direct enforcement resources towards areas requiring greater scrutiny. The proposed updates to property valuation tables are intended to provide a more consistent framework for property-related taxation, while the rationalisation of exemptions would form part of broader efforts to strengthen provincial revenue generation. The programme also aims to improve taxpayer compliance, with the longer-term objective of increasing the revenue that the provincial government generates from its own sources.
The second component will address public expenditure efficiency and accountability, with particular attention to health and education. The programme plans to improve budget allocation and expenditure management in these sectors, including the timely release of non-salary funds to schools and primary healthcare facilities. Delays in operational funding can affect the ability of public institutions to meet routine requirements, making the timing and management of allocations an important part of the proposed reforms. The initiative will also support digital payments, stronger internal financial controls and improved accountability in the use of public resources.
Under this component, the focus will extend beyond budget allocations to the processes through which funds are released, spent and monitored. Digital payment arrangements and stronger financial controls are intended to improve the management of public transactions and reinforce oversight of expenditure. The emphasis on schools and primary healthcare facilities reflects the programme’s plan to make operational funding more predictable in sectors that deliver essential public services.
The third component will strengthen the KP Bureau of Statistics, with the aim of improving the collection, integration and publication of provincial data. More consistent statistical information can help authorities prepare budgets, assess policy needs and monitor development outcomes. The programme is expected to support the availability of information on key human development indicators, allowing government departments to use data more systematically when evaluating public spending and planning future interventions.
Several reforms are expected to begin within the first 12 to 18 months of implementation. These include the introduction of risk-based tax audits, establishment of a harmonised property valuation framework, more timely release of operational funds to public facilities and integrated monitoring of key human development indicators. These early measures are intended to establish administrative and monitoring systems that can support the programme’s broader objectives over the five-year period.
By October 2031, the programme aims to increase KP’s own-source revenue, improve taxpayer compliance and make expenditure on education and primary healthcare more predictable and efficient. Achieving these targets will depend on implementation across the participating departments, the adoption of the planned systems and the ability to sustain improvements in revenue administration and financial management.
The initiative follows earlier World Bank-supported public finance reforms in the province. One such programme was the $118 million KP Revenue Mobilisation and Public Resource Management Programme, which was approved by the Central Development Working Party in December 2017. It comprised $100 million in results-based financing and $18 million in investment project financing, with implementation scheduled through June 2026.
KP also implemented the Khyber Pakhtunkhwa Spending Effectively for Enhanced Development programme, another initiative focused on public financial management reforms that was scheduled to run until June 2026. The newly approved concept proposal introduces a further reform programme with a timeline extending to October 2031, combining revenue mobilisation, expenditure management and statistical capacity-building within a single framework.
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