KP to launch six-year fiscal reform programme

Khyber Pakhtunkhwa is preparing to launch a six-year reform programme aimed at tightening public finances and making government services work better, Dawn reported. Later this month, the World Bank is set to sign off on a $200 million credit from the International Development Association. The overall cost is put at $650m, with the provincial government meeting the balance.

Tax measures for the ex-Pata areas and the merged districts sit outside the financing scope, since the province has kept their tax exemptions in place. A $20m technical assistance element will cover those areas instead. Property owners, farm income taxpayers and vehicle owners are expected to deal with a clearer, more service-focused tax office. Around 1.3 million people using rural health centres and roughly 3.7 million children in state primary schools are also projected to gain.

A programme document portrays a fragile revenue position: federal transfers remain central to the budget, and own-source revenue funds a shrinking slice of rising spending. Salaries and pensions absorb much of the outlay, while a narrow tax base, split revenue administration across three agencies and weak digital capacity hold back collection.