Government approves $300 million pricey loan
ISLAMABAD: On Thursday, the interim government authorized four development projects totaling Rs126 billion and granted a highly expensive loan of $300 million for boosting tax compliance, a goal that requires nothing more than a strong commitment and a productive tax department.
The Domestic Resource Mobilization Reform initiative, which would be supported by the Asian Development Bank (ADB) with a $300 million loan at over 6% interest in dollar terms, was also authorized by the Central Development Working Party (CDWP).
Dr. Shamshad Akhtar, the interim finance minister, asked the ADB last week to approve the project in September, but the lender declined because of some formalities.
Pakistani authorities are obtaining loans for a cause that just requires a strong resolve, despite falling deeper and deeper into the debt trap. For Federal Board of Revenue (FBR) reforms, the Pakistan Tehreek-e-Insaf (PTI) government previously obtained a $400 million loan from the World Bank.
The former two prime ministers and the current army leader are unhappy with the FBR despite receiving loans.
For the purpose of bringing the tax deficit down to 20% of the potential tax collection, Pakistan will borrow $300 million at an interest rate of above 6%. The three-year base has been utilized by the government and ADB to demonstrate performance and establish goals.
