World Bank proposes $200 million financing to help KP nearly double tax revenue by 2031

A World Bank document, as reported by Profit by Pakistan Today, shows the lender has proposed $200 million to support Khyber Pakhtunkhwa in widening its tax net and improving public services. The target is for the province's internally generated tax income to climb from Rs64 billion to Rs122 billion in real terms by June 2031. The overall programme is estimated at $650 million, of which $450 million would come from the provincial government and the rest from the lender.

Funding would come as a $100 million International Development Association (IDA) credit alongside a $100 million IDA loan. Running from FY2027 through FY2032, the scheme still awaits World Bank approval, which is scheduled for October 29, 2026. Three priorities are lifting tax yields in the province, raising the quality of health and education outlays, and bolstering statistical capacity.

Planned changes also include a wider tax base, a simpler tax process and new digital tools at the KP Revenue Authority, the Excise Taxation and Narcotics Control Department and the Board of Revenue. The bank argued that property, farm income and some services are under-taxed, while fragmented administration and thin data exchange hold back growth. Social indicators remain under strain: 35.3% of residents fell under the national poverty threshold in FY2025, and 36% of school-age children were not enrolled.