ISLAMABAD (MNN); Pakistan has cleared a $200 million (Rs57 billion) loan from the Asian Development Bank (ADB) for digitalising revenue administration, despite significant reservations raised by the Planning Commission over the project’s feasibility, sustainability and measurable outcomes.
The project, titled Transforming and Digitalising Revenue Administration (TADRA), was among seven schemes with a combined estimated cost of Rs116 billion considered by the Central Development Working Party (CDWP) at a meeting chaired by Planning Minister Ahsan Iqbal.
The minister conditionally recommended the Rs57bn TADRA project to the Executive Committee of the National Economic Council (ECNEC), directing the state-owned Pakistan Institute of Development Economics (PIDE) to conduct a comprehensive review of its business model.
The project aims to increase Pakistan’s tax-to-GDP ratio from the current 11.1 per cent to 13.5pc by 2029, while expanding the taxpayer base and improving the efficiency and transparency of revenue administration.
Questions over billions already spent
The Planning Commission noted that Pakistan had already obtained around $4.7 billion from development partners for reforms aimed at strengthening the tax system, yet the tax-to-GDP ratio has continued to remain around 11pc.
PIDE had previously examined government borrowing for reforms in the energy and tax sectors. In view of the findings, the Planning Commission called for a detailed impact assessment of earlier programmes, including the Tax Administration Reforms Programme (TARP), Pakistan Single Window (PSW), Integrated Transit Trade Management System (ITTMS) and Pakistan Raises Revenue Project (PRRP).
The assessment is intended to determine whether previous reforms delivered the expected results and whether the money spent represented value for taxpayers.
FBR asked to establish project link with transformation plan
The Planning Commission also demanded that the Federal Board of Revenue (FBR) obtain concept clearance confirming that TADRA is fully aligned with the FBR’s Rs350bn Transformation Plan approved by the federal cabinet.
It sought a comprehensive matrix of policy actions under the transformation plan, together with the implementation status of initiatives undertaken under previous, ongoing and proposed programmes.
The FBR said TADRA forms part of its 2024-28 Transformation Plan, aimed at accelerating digitalisation of the revenue administration system, improving operational efficiency and taxpayer compliance, ensuring transparent customs clearance and enhancing Pakistan’s competitiveness.
However, the Planning Commission stressed that the project should not move forward without an impact analysis of previous FBR reform programmes, a gap analysis of existing infrastructure, a needs assessment and a feasibility study.
It also called for clearly defined, quantifiable results-based measurement indicators and a mechanism to ensure that project activities remain sustainable after completion.
External experts from FAST-NUCES and NUST also pointed out shortcomings, including the absence of a comprehensive gap analysis and data-security framework. Questions were also raised about the basis of the proposed artificial intelligence model and the existing system that the new technology would replace or integrate with.
Data storage to be expanded
Under the project, existing hardware and software infrastructure will also be upgraded. Server capacity is expected to increase from 850 terabytes to three petabytes as data requirements grow.
The increased storage would support video-camera storage and processing systems planned for production lines in five major sectors, including sugar, cement, tobacco and textiles.
Rs37.2bn PakSat-2 project also sent to ECNEC
The CDWP also recommended the Rs37.2bn PakSat-2 Satellite System to ECNEC for approval.
The project seeks to replace PakSat-IR, which is approaching the end of its 15-year operational life, and establish a sovereign and secure mobile communications network operating independently of the public internet for at least 10,000 government users.
The Planning Commission had earlier raised technical concerns about the project and advised strengthening the capabilities of the Rs709 million PAKAWAZ Secure Mobile Communication Ecosystem.
The proposed system would support secure audio and video calls, voice and video messaging, file and photo sharing, centrally managed contacts, text and group messaging, along with dedicated application servers, mobile handsets and kill-switch controls.
The National Telecommunication Corporation (NTC), which proposed the project, subsequently improved its specifications to strengthen confidentiality, integrity, availability and national data sovereignty.
The system is designed around an isolated private 4G LTE core network, physically or logically separated from the public internet, with officials citing national security requirements and lessons from recent regional conflicts and other security incidents.
Five other projects approved
Apart from recommending the two major projects, worth a combined Rs94.3bn, to ECNEC, the CDWP approved five schemes costing a total of Rs21.59bn.
These included Rs5.015bn for Phase-II of the Promotion of Olive Cultivation on Commercial Scale in Pakistan. The first phase was implemented in Kallar Kahar, Islamabad and the wider Potohar region, while the second phase will expand the initiative to Balochistan and the newly merged districts.
The CDWP also approved Rs6bn for a revised project to establish the Dr Ashfaq Ahmad Khan Centre in Basic Sciences across eight national centres. Seven centres covering artificial intelligence, cyber security, big data and cloud computing, GIS and satellite technology, automation and robotics, applied mathematics, and livestock and genomics have already been completed.
Another Rs3.623bn was approved for the Development of Geospatial Complex (Geo-AI Development & Innovation Hub) to support Pakistan’s space programme.
The meeting further approved Rs5.758bn for the revamping and refurbishment of facilities at the Pakistan Sports Complex in Islamabad.
A water-sector scheme costing Rs338.179 million was also approved for improving the high-frequency radio network of WAPDA’s Water Resources Management Directorate.
