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PRESS RELEASE

Inspection Panel Recommends against Investigation of Pakistan Tax Administration Reform Project

April 9, 2010



WASHINGTON, April 9, 2010 — The World Bank today announced that the Inspection Panel has released its Eligibility Report on the Request for Inspection of the Pakistan Tax Administration Reform Project (TARP).

The Panel is a non-judicial, fact-finding body that acts independently, impartially, and objectively in determining whether the Bank is complying with its own policies and procedures, which are designed to ensure that Bank-financed operations provide social and environmental benefits and avoid harm to people and the environment. It reports directly to the World Bank’s Board of Executive Directors.

On January 19, 2010, the Panel registered the Request for Inspection sent by some members of the Officers of Customs and Excise Group Association, who alleged that they have been disadvantaged by the administrative merger of the Customs and Excise Group and the Income Tax Group into one cadre titled Inland Revenue Service (IRS).

Following a review of the Request for Inspection, the Panel concluded that an investigation of whether the World Bank has complied with its operational policies and procedures with respect to the allegations contained in the Request is not warranted. Although noting the importance of the issues raised in the Request, the Panel holds the view that the proposal to create the IRS was not a departure from the original project objectives of TARP.

The Panel also concluded that the issue of the potential impact of administrative reforms on career prospects for promotion and professional development did not raise issues of compliance with the World Bank’s operational policies and procedures. Moreover, the Panel clarified in its report that it is not addressing matters of legality under domestic law.

The Panel did, however, note that the implementation of TARP could have benefitted from more extensive consultations by the World Bank team with relevant stakeholders. Recognizing the importance of communication and consultation for all significant institutional reforms, the World Bank Management has proposed to offer additional support to the Federal Bureau of Revenue (FBR) on human resource development and change management through TARP. The Inspection Panel welcomed this proposal for enhanced support.

The Request for Inspection, Management Response, and Inspection Panel Eligibility Report are available on the Inspection Panel’s website.

About the Inspection Panel:
The Inspection Panel was established in September 1993 by the World Bank Board of Directors as an independent accountability mechanism of the World Bank. The three-member Panel provides a forum for people who believe they may be adversely affected by Bank-financed operations to bring their concerns to the highest decision-making levels of the World Bank. It is a non-judicial, fact-finding body that acts independently, impartially, and objectively in determining whether the Bank is complying with its own policies and procedures, which are designed to ensure that Bank-financed operations provide social and environmental benefits and avoid harm to people and the environment. The Panel reports its findings to the Bank’s Board of Executive Directors which then decides future actions.

About TARP:
At the request of the Government of Pakistan, the World Bank approved the Tax Administration Reform project on December 12, 2004 to assist the Federal Board of Revenue (FBR) in implementing its own reform strategy. The project’s development objective was to fundamentally reform the FBR into a more efficient and effective revenue administration system. This included measures to increase tax collection, promote voluntary compliance, and guarantee fairer and more equitable application of tax laws. The total cost of the project is $149 million. The project is financed by a $78.5 million credit from the International Development Association (IDA), a $24.4 million loan from the International Bank for Reconstruction and Development (IBRD), a $23 million grant from the UK’s Department for International Development (DfID), and the Government of Pakistan ($23 million).

Media Contacts
World Bank Islamabad
Mariam Altaf
Tel : (92-51) 2279641
mariamaltaf@worldbank.org
World Bank Washington DC
Erik Nora
Tel : (202) 458 4735
enora@worldbank.org


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