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QUARTERLY UPDATE

DECEMBER2015

AGR

from the British people

AEOI AutomaticExchangeofInformationBETF Bank-executedtrustfundCCP CompetitionCommissionofPakistanCPPA-G CentralPowerPurchasingAgencyGuaranteeDMFAS DebtManagementandFinancialAnalysisSystemDMU DebtManagementUnitEAD EconomicAffairsDivisionFBR FederalBoardofRevenueGATT GeneralAgreementonTariffsandTradeGEPCO GujranwalaElectricPowerCompanyIBRD InternationalBankforReconstructionandDevelopmentICT InformationandcommunicationtechnologyIFC InternationalFinanceCorporationIT InformationtechnologyJIT Just-in-timeJPCL JamshoroPowerCompanyLimitedMDTF-AGR Multi-DonorTrustFundforAcceleratingGrowthandReformsNEPRA NationalElectricPowerRegulatoryAuthorityNTDC NationalTransmissionandDispatchCompanyPC PrivatizationCommissionPPP Public–privatepartnershipsPRA PunjabRevenueAuthorityRE Recipient-executedRETF Recipient-executedtrustfundRMP RevenuemobilizationplanSOE State-ownedenterpriseSRB SindhRevenueBoardTA TechnicalassistanceTF TrustfundUNCTAD UnitedNationsConferenceonTradeandDevelopmentVAT Value-addedtaxWBG WorldBankGroup

Acronyms and Abbreviations

MDTF-AGR DECEMBER 2015

TheMulti-DonorTrustFundforAcceleratingGrowthandReforms(MDTF-AGR)ismakingsoundprogressintermsofhelping�illknowledgegapsandenhancingthecapacitytodesignandimplementPakistan'seconomicreformsprogram.TheMDTFreceivedasecondtrancheofUS$6.1millioninFY2016,whichwasallocatedtothechildtrustfunds(TFs)depictedinFigure1.ThetotalcontributiontoAGRcurrentlystandsatUS$10.6million.Thusfar,US$2.8millionofthisamount(27%)hasbeendisbursed.However,commitmentstotalUS$1.8millionagainstanavailablebalanceofUS$5.6million.DisbursementsandcommitmentsagainsteachTFarepresentedinFigure2.

OVERVIEW Multi Donor Trust Fund for Accelerating Growth and Reforms

Figure 1: Distribution of funds (US$ mn)

IFC Punjab Energy Efciency0.4

IFC SOE Reforms and Privatization1.9

Tax Policy and Tax Administration Reform2.1for an Increased Fiscal Space

Energy Sector Reform0.7

Debt Management Reforms0.635

SOEs and Private Sector Reforms0.1


0.00

0.60

1.00

1.20

1.40

Disbursements USD Commitments USD

Tax Policy & Tax AdministrationReform for an Increased Fiscal

Space

0.20

0.40

ThisquarterlyreportcoverstheperiodSeptembertoDecember2015.TheachievementsandplannedactivitiesagainsteachchildTFaredescribedbelow.

Figure 2: Disbursement and commitments against each child TF

Dept ManagementProgram

SOE Reforms and Privatization

Energy Sector Reform

IFC PunjabEnergy Efciency

IFC SOE Reformsand Privatization

Program Management


The Economic Affairs Division (EAD) was provided technical assistance (TA) in evaluating the advantages anddisadvantagesofupgradingitsversionoftheDebtManagementandFinancialAnalysisSystem(DMFAS)asagainstinvestinginthecurrentversion.TheUnitedNationsConferenceonTradeandDevelopment(UNCTAD),whichownstheDMFAS,wasalsoengagedintheconsultativeprocess.

TheMinistryofFinance(DebtPolicyCoordinationOf�iceandExternalFinanceWing)wasprovidedsupportin�inalizingitsPC-I.ThedocumenthasbeensubmittedtotheFinanceMinisterforapproval.

Program Development Objective

To ensure that government debt and cash management in Pakistan follows a sound policy and operational footing in order to contribute to the wider objectives of sustaining macroeconomic stability and ensuring efcient nancial management on the part of the Government of Pakistan.

Implementation performance and achievements as of December 2015

Debt Management ReformsProgram Management Team Leader: Saadia Refaqat

US$ 1,130,000Allocated Budget:

US$ 262,915 (23.3%)Disbursement:

Disbursement projections up till 31 March 2015Projections:

are as follows:Bank-executed trust fund (BETF): US$ 217,000

Recipient-executed trust fund (RETF): US$ 434,210

Outstanding commitments: US$56,954 (5.0%)

Federallevel


OngoingTAtohelpstrengthentheDMFAS(debtrecordingandreportingsoftware)attheEAD.

OngoingsupporttotheEADinthepreparationand�inalizationofitsPC-I.

Enablingthestaffofclientagenciestoparticipateininternationalandlocaldebtmanagementtrainingsessions(asandwhenrequired).

Approvalofthe�inanceministry'sPC-IforsettingupanRETFandinitiatingRETFactivities(January/February2016).

Scopingmissionto�inalizesupportactivitiesfortheExternalFinanceWingundertheRETFarrangement(January2016).

Activities planned for next quarter

Subnationallevel

A knowledge-sharing event (Phase I) was held from 26 August to 1 September 2015 to support subnational debtmanagementinSindh.Themissiondeliveredtrainingsessionsonsubnationaldebtmanagement,whichwereattendedbystaff of the Debt Management Unit (DMU) (Sindh), the Finance Departments (Sindh and Punjab), the Planning andDevelopmentDepartment(Sindh)andvariousacademics.

TheDMUSindhwasprovidedsupportinidentifyingtherolesandresponsibilitiestypicalofasubnationalDMU.

TheDMUSindhandControllerGeneralofAccountsOf�icewereprovidedsupportindevelopingdebtmanagementsoftwareforsubnationaldebtmanagementinSindh.

The�irstquarterlynewsletterontheachievementsandactivitiesoftheDebtManagementSupportProgramwaspublished.

Federallevel


Subnationallevel

Knowledge-sharingevents(PhaseII)tosupporttheSindhgovernment'ssubnationaldebtmanagement(February/March2016).

ContinuoussupporttotheDMUSindhandtheControllerGeneralofAccountsOf�iceinimplementingadebtmanagementsystemforSindh.

SupporttotheSindhgovernmentindevelopingamanualonexternaldebtmanagementproceduresandoperationsthatclearly speci�ies the roles and responsibilities of various institutions, entities and units involved in subnational debtmanagement.Thiswillhelpcreateasystematicroadmapforsharingandconsolidatinginformation(February2016).

TAmissiontohelptheSindhgovernmentdraftasubnational�iscalresponsibilitylawfortheprovince.

Identi�icationmissiontodiscussapossibledebtmanagementsupportprogramwiththeKhyberPakhtunkhwagovernmentfortheprovince(February/March2016).

Enablingsubnationalgovernmentstafftoparticipateinlocalandinternationaldebtmanagementtrainingsessionsandforums.

Continuoussupport(on-siteandoff-site)totheDebtPolicyCoordinationOf�iceinupdatingitsMedium-TermDebtStrategy.



To support the Government of Pakistan's energy sector reforms program by strengthening the capacity of key institutions to design, implement, monitor and communicate the reforms agenda.

Energy Sector Reforms

Richard Spencer and Defne GencerProgram management team leaders:

International Bank for Reconstruction and Development Allocated budget:

(IBRD): US$ 1,450,000; International Finance Corporation (IFC):

US$ 800,000; total: US$ 2,250,000.

US$ 484,094 (33%), IFC: 0 (funds transfer just completed).Disbursement:

IBRD: US$ 360,000 (24%), Disbursement projections:

IFC: US$ 200,000 (until 31 March 2016).

IBRD: US$ 568,850 (39%), IFC: US$ 597,307.Outstanding commitments:


MinistryofWaterandPower:Areviewofmarketruleswascarriedout.TheprocessofseparatingandoperationalizingtheCentralPowerPurchasingAgencyGuarantee(CPPA-G)andmodifyingtheNationalTransmissionandDispatchCompany's(NTDC)licensewascompleted.Dialogonthenextstepsinreformwascontinued.FurtherdetailingoftheTAformarketdevelopmentandsupportforpreparationofjust-in-time(JIT)analysisforspeci�icreformprioritiesisunderway.

National Electric Power Regulatory Authority (NEPRA): Two international experts – one on multi-year tariffmethodologyandtheotheronperformance-basedregulation–initiatedworkwithNEPRA.The�irstexpertalsoundertook

Thefollowinginstitutionswereprovidedsupportasdescribedbelow:


amissiontoworkwithNEPRAondistributiontariffreviews.AnotherinternationalexpertisprovidingsupporttoNEPRAoncommunicationandoutreachactivities,andcontributingtothenewlydraftedoutreachprotocol.

Privatization Commission (PC): The World Bank Group (WBG) team continued its support to the PC with twointernationaladvisors.InadditiontoprovidingTAintheformofJITnotesonspeci�icissues,thetwoadvisorscontinuedworkingwithPCmanagementandstaffandaccompaniedthemtoinvestorroundtableandtrainingeventsinWashington,DC.Aknowledgeexchangevisiton theTurkishelectricityprivatizationexperiencewasorganized inDecember2015,throughwhichtheSecretaryPrivatization,hisadvisorandconsultantmetkeydecisionmakersandagencies.

MinistryofPetroleumandNaturalResources:Internationalconsultantsongassectorreformsandrestructuringheldameetingwithsectorstakeholdersandproducedaninitialanalysisreport.

NTDC:TheinternationalconsultantinitiatedareviewoftheNTDC'scapacitybuildingneedsandthedevelopmentofaworkprogram.

Punjabgovernment:TheIFCishelpingthePunjabgovernmentdevelopa�ive-yearenergyef�iciencystrategy.Consultantshavebeenengagedtosupportthedevelopmentofenergyef�iciencystandardsandalabelingprogramforindustry(motorsandfans).

Ministry of Water and Power: Continued discussions on the next items in the work program, including marketdevelopmentoversight,distributedgenerationandwheeling.


Overall,implementationiscontinuingwellandactivitiesarerampingup.Therearenorecipient-executed(RE)activities,norarethereany�inancialmanagementorprocurementconcerns.


NEPRA:Thetwointernationaltariffadvisorswillcontinuetheirwork,whichincludesprovidingsupporttoNEPRAstaffinreviewingthenextroundofpowerdistributioncompanytariffpetitions,advisingoncommunicationsandoutreach,andconsultations on drafts of secondary legislation. Further support will be provided for the development of a marketdepartmenttosupportmarketdevelopmentandoversightoftheCPPA-G.

PC:Continuedassistanceinsectorstakeholderengagementanddecision-makingsupportthroughthequarter.TrainingprovidedbytheTurkishCompetitionAuthorityisplannedforlateJanuaryinIslamabadandwillbene�itthePC,NEPRA,theMinistryofWaterandPowerandtheCompetitionCommissionofPakistan(CCP).

NTDC:The international consultantwill review theNTDC's capacitybuildingneedsanddevelopaworkprogram forcontinuingwork.

MinistryofPetroleumandNaturalResources:AsecondreportwithsectorstructureoptionsisdueinJanuary2016,followedbyastakeholderconsultationworkshopinearlyFebruary2016.Theinternationaladvisorwillhelptheministryaddresschallengesrelatedtobalancingprovincial–federalinterestsandobjectivesrelatedtonaturalgas.

IFC–Punjabenergyef�iciency:AcontractwithinternationalconsultantstosupportPunjabinthedevelopmentofenergyef�iciencystandardsandalabelingprogramforindustrywillbesignedinJanuary2016.AninceptionmissionisplannedforFebruary2016.



To (i) strengthen the PC's capacity to revive the privatization program and increase private sector participation in the economy, and (ii) improve the policy framework and performance management of state-owned enterprises (SOEs) to ensure that scarce scal resources are used efciently.

State-owned Enterprises (SOEs) & Private Sector Reforms

Program management team leaders: Gabi George Afram and Sarwat Aftab

US$750,000Allocated budget:

US$ 493,259 (66%)Disbursement:

US$ 300,000Projections:

US$ 167,000Outstanding commitments:


Aninvestors'conferenceonthepowersectorwasheldinOctober2015inWashington,DCforPCstaff.Alongwithpotentiallocal and international investors, key government counterparts such as NEPRA, the Water and Power DevelopmentAuthorityandCivilAviationAuthorityparticipatedintheevent.

Atwo-daytrainingworkshopforPCof�icialswasheldinWashington,DCinOctober2015toshareinternationalexperienceandlearnfromcasestudiesonpowersectorprivatizations.

TwopublicsectorenterprisecorporategovernanceconsultantswereengagedfortheSecuritiesandExchangeCommissionofPakistan(September2015)tobuilditscapacitytoimplementthePublicSectorCompanies(CorporateGovernance)Rules2013.

The Establishment Division organized a follow-up government performance management workshop in Pakistan-


AcompetitionmissionwillvisitPakistaninFebruary2016tocarryoutinitialscopingworkoncapacitybuildingfortheCCP.ThemissionwillalsoincludeatrainingcomponentforCCPenforcementstaff,thejudiciaryandPCstaff.

AnSOEcorporategovernancemissionwillvisitPakistaninMarch2016toassesstheimplementationofthePublicSectorCompanies (Corporate Governance) Rules 2013. The mission will work closely with the Securities and ExchangeCommissionofPakistantoconducttrainingsessionsontheRulesforkeylineministries.

Aseriesofseminarswillbearrangedtocreateabroadunderstandingofprivatizationanditsimpacts.Thiswillhelpshareinternationalbestpracticeswithjournalists,parliamentariansandotherkeystakeholders(MarchtoJune2016).

AsenioradvisoronRETFdesign/implementationandPPPwillbeengagedfromJanuarytoJune2016todevelopanRETFworkprogramforthePCandtoimplementthePPPdiagnostictoolkit.

The�ifthDonorCoordinationmeetingwillbeorganizedinFebruary2016tofacilitatedonordialogandsharedlearning.


administeredKashmir.TheWBGenabledanexpertfromtheGovernmentofIndia(MrNazrulIslam)–whohadearlierledBangladesh'seffortsinthis�ield–totakepartintheworkshop.

Aseniorpublic–privatepartnership(PPP)expertfromtheWBGledamissiontoPakistan(December2015)tofurtherdevelop theworkprogram for theMDTF'sPPPcomponent.Themissionalsohadaprivatizationcomponentaimedatfollowinguponthelearningoutputsoftheinvestors'conferenceheldearlierinthequarter.

ThefourthDonorCoordinationMeetingwasheldinNovember2015toupdatedonorsontheinvestors'conferenceandsharedevelopmentsinthePC'sworkprogram.


GujranwalaElectricPowerCompany(GEPCO)

AllocatedBudget:US$2,500,000OutstandingCommitments:N/ADisbursement:US$139,997(5.6%)DisbursementProjections:US$280,000duringtheupcomingquarter.

Theduediligenceprocessisunderway,albeitabitslow,giventheresponsefromGEPCOontheprovisionoftherequireddocument.

IFCPublicPrivatePartnershipTransactionAdvisory

JamshoroPowerCompanyLimited(JPCL)

DetailedmeetingswereheldinDecember2015withJPCLandaDirectorofthePCBoard.Duringthesemeetings,technical,legalandaccountingdue-diligenceissueswerediscussed.Due-diligencedocumentswerereceivedonafairlyregularbasisduringthereportingperiod.Softmarketconsultationontheinclusionofcoalpowerplantwasinitiated.A�inaldecisionwillbemadeinJanuary2016.


Finalizetheduediligenceprocess(February2016)Conductvaluationofthecompany(March2016)Preparethemulti-yeartariffpetition(March-April2016)

Activitiesplannedfornextquarter

GEPCO*

JPCL

*ThetimelineiscontingentonprovisionoftheduediligencedocumentsandapprovalfromthePCBoard

Finalizetheduediligenceprocess(February/March2016)Conductvaluationofthecompany(March2016)



To increase scal space, which translates into quality social expenditure.

Tax and Trade Tariff Reforms

Program management team leader: Raul Felix Junquera Varela and Mohammed Waheed

US$ 3,505,000Allocated budget:

US$ 470,000Outstanding commitments:

: US$ 730,000Disbursement:

US$ 2,200,000 (June 2016)Projections:

In the following months, an RE component will be opened for an estimated US$ 4.8 million.


Theprogramencompassesactivitiesaimedatenhancingthequalityofthetaxsystem,buildingtheanalyticalcapacityofboththe federal and provincial tax administrations, modernizing and streamlining core tax administration processes, andrevampingandupgradinginformationtechnology(IT)infrastructureandsystems.

FollowingWBGTAmissionsundertakenfromOctober2014toDecember2015,theWBGandthefederalandprovincialtaxadministrationshaveagreedonadetailedworkprogramforthe�irstyearofimplementation.Theoutputstobedeliveredinthisperiodinclude,interalia:(i)apreliminaryfunctionalreviewoftheFederalBoardofRevenue(FBR);(ii)anassessmentof


FBRITsystems,includingaproposalforamultiannualinformationandcommunicationtechnology(ICT)strategy;(iii)thedevelopmentofaroadmapforautomatingFBRcorebusinessprocesses;(iv)preparationofarevenuemobilizationstrategyforPunjab;(v)establishmentofaTaxReformUnitinPunjab,whichhasstartedproducingtaxpolicystudiesandtaxcollectionreports;(vi)ataxlitigationassessment;(vii)ataxauditworkplanstartingwithacomprehensivetrainingprogram;and(viii)analyticalstudiesontaxpolicysuchasacapitalgainsstudyandanalysisoftheadvantagesanddisadvantagesofvalueaddedtax(VAT)vis-a-vissalestax.

Thecurrentstatusofworkindifferentareasisasfollows:

Taxpolicy

TheMDTFiscurrentlysupportingtheestablishmentoftaxintelligenceandmarket,monitoringandinterventionunits.Undercustoms,oneofitsactivitiescontemplatesredraftingthecurrentCustomsActtoalignitwiththeKyotoProtocol.Astudyoncapitalgainstaxhasbeencompletedandisbeingpeer-reviewed.AninitialdraftonVATvis-a-vistheestablishmentofasingle-stagesalestaxwasrecentlysharedwiththeFBRforcomments.Attheprovinciallevel,aTaxReformUnithasbeenestablishedinPunjabandhasalreadystartedproducinganalyticalworksuchasarevenuemobilizationplan(RMP)fortheprovinceinaddition to tax collection reports and analyses of non-tax revenues or preliminary revenue forecasts. A draft study onagriculturalincometaxwassharedwiththeprovincialauthoritiesinDecember2015.

BuildingcapacitythroughtheestablishmentoftaxpolicyanalysisandmarketanalysisunitsattheFBRisakeypriorityundertheprogram.TheworkplancontainsadetailedroadmapforestablishingthesetwounitsundertheTF'sREcomponent.

InternalRevenueService

Taxaudit:InDecember2015,athree-dayworkshoponforensicauditswasheldinIslamabadandtwoworkshopsontaxauditbasic skills held in Karachi and Islamabad. Following these, the team visited the Large Taxpayer Units in Karachi andIslamabadandtheRegionalTaxOf�iceinIslamabad.AworkshoponbasictaxauditskillswillbeorganizedinJanuary2016inLahore.TheteamisworkingcloselywithFBRtaxauditorsonanalyzingcasestudiesanddraftingauditmanuals. In the


followingmonths,comprehensiveauditswillbeconductedofeconomicsectorssuchastelecommunicationsandbanking.

Taxlitigation:WorkonstrengtheningtaxlitigationstartedinSeptember2015.AtaxlitigationassessmentwassubmittedtotheFBRinOctober2015;itiscurrentlybeinginternallypeer-reviewedtoensureitmeetstherequiredquality.Duringthe�irstquarterof2016,theteamwilldraftguidelinesongoodlitigationpracticesforthemostfrequentcasesandconducttrainingsessionswithFBRof�icials.

Internationaltaxation:AscopingmissiononinternationaltaxationtookplaceinDecember2015todiscussFBRpotentialTAsupportintransferpricing.AdetailedworkprogramwassharedwiththeFBR'sinternationaltaxunit.Thiswillcomplementcurrentsupportontheexchangeofinformation.Itisalsoworthmentioningthataworkshopontransferpricingauditswasheldduringthemission.

Customs:Activitiestosupportimprovedorganizationalperformanceandbetterrevenueoutcomeswereincludedintheworkprogram and sharedwith the FBR. These include: (i) capacity building in the application of Article VII of the GeneralAgreementonTariffsandTrade(GATT),(ii)accesstocommercialreferencepricingdata,(iii)thedevelopmentofbusinessintelligencecapacitytosupportimprovedpro�ilingandtargeting,(iv)provisionofsupportandresourcesforrewritingtheCustomsAct1969,and(v)inputtothetermsofreferenceforapilotproductionmonitoringsystemforexcisableproducts.Alltheseactivitieswillstartinend-January2016.

ICT

TheWBGhasbeenworkingonthreeareassinceJune2015:(i)thedevelopmentofanICTstrategicplan,whichincludesanactionplan,achangemanagementprogramandatrainingplan;(ii)anestimatedbudgetforenhancingtheITinfrastructure;and(iii)anupdatedauditreportonthecurrentstatusoftheITWing,basedontheDeloitteAssessment.ThissetofdocumentswassubmittedinNovember2015andapresentationmadetotheFBRboard.AttheFBR'srequest,additionaldocumentsweresubmitted,includingadetailedtimelinefortheimplementationoftheactionplanandashorttechnicalnoteonoutsourcingtheITsystemfortaxadministration.


Provincialtaxsystem

Punjab:TheWBGissupportingthedevelopmentandimplementationofanRMPfortheprovince.AreviseddraftwassharedwiththeFinanceDepartmentinOctober2015.Subsequently,workshopsheldinDecember2015withthedepartmentandprovincialrevenuebodiesledtoinputsforthecompletionoftheRMPandimplementationplan.TheseworkshopswereprecededbyapresentationtothedepartmentonkeyelementsoftheRMPandreformsroadmap.

Asindicatedabove,theTaxPolicyReformUnitinitiatedactivitiesinOctober2015.TheunitoperatesundertheadministrativecontroloftheSecretaryFinanceandwillconductevidence-basedtaxanalyticalstudiestoenableinformeddecision-makingintaxpolicyandensureataxsystemthat isef�icientandfair.Theunithasalreadysubmittedaquarterlyreportontaxcollectionperformancevis-a-visrevenuetargetsandinitialrevenueprojectionsforFY2016.Ithasalsoproducedtwodraftpapersonnon-taxrevenuesandnuisancetaxes.

Implementation of the agreedwork programwith the Punjab Revenue Authority (PRA) during this period included afunctionalreviewofthePRAandahumanresourceassessment.Workonstrengtheningthetaxauditfunctioncontinued.Themaindeliverablesincludesupporttothedraftingofauditpolicies,areviewoftaxauditregulationsandprocedures,anda�ive-daytaxauditcourseheldinSeptember2015.AtthePRA'srequest,anITassessmentoftheinstitutionthatwasscheduledforSeptember2015waspostponedtothe�irstquarterofFY2016.

Sindh:AworkshoponsubnationaltaxationtookplaceinKarachion5–7October2015.Representativesfromthenational(the FBR) and provincial tax administrations and international experts discussed key features of a modern VAT, theharmonizationofgeneralsalestaxregulationsinPakistanandtheadvantagesanddisadvantagesofVATvis-a-visasingle-stagesalestax.

TheITsystemsoftheSindhRevenueBoard(SRB)andPRAhavebeenreviewedtosupportbusinessprocesses.AdetailedassessmentoftheSRB'sITsystemisexpectedtostartinthe�irstquarterof2016.Currentanalyticalstudiesbeingpreparedincludetwodraftpapersonagriculturalincomeandpropertytaxes,witharelatedmissionscheduledforthe�irstquarterof


2016.TheWBGisalsosupportingtaskstostrengthentheSRBtaxauditfunction.SRBpersonnelparticipatedinaworkshoponbasictaxauditskillsheldinDecember2015inKarachi.


Continueimplementingthetaxauditworkprogramwithaspeci�icfocusonthetrainingprogram.

Providesupportintheareaoftaxcollectionbyhelpingcleanuptaxpayerregistrationandcurrentaccounts,andhelpingdesignandimplementanewtaxpayercurrentaccountande-taxadministrationsystem(�irstquarterofCY2016).

CompletethepreliminaryfunctionalreviewoftheFBRinMarch–April2016.Contingentonreceivingtherequesteddata,thisreviewwillbecompletedinFebruary2016.ItwillincludeasetofkeyperformanceindicatorstomonitorprogressintheFBR-relatedareasoftheWBGTAaswellasaprototypemanagementinformationsystemtomonitortheFBR'sachievementoftheseindicators.

Support international taxation by adopting the Automatic Exchange of Information (AEOI) standard. This includessupportinganAEOIpilotprojectinconjunctionwithHerMajesty'sRevenueandCustoms(January2015).

Supporttheupdatingoftransferpricinglegislationandcapacitybuildingintransferpricingaudits(�irstquarterofCY2016).

ContinueprovidingTAaimedatstrengtheningtaxlitigationintheFBR.

StrengthenthecapacityofCustomsandExciseinthefollowingareas:applicationofGATT,thedevelopmentofbusinessandintelligencecapacityforbetterpro�ilingandtargeting,andaccesstocommercialreferencepricingdata(�irstquarterofCY2016).

Supportapilotproductionmonitoringsystemforexcisableproducts(�irstquarterof2016).

· MDTF-AGR DECEMBER 2015

StartacomprehensiveanalysisofthetaxsysteminJanuary/February2016.AworkingsessionwiththeFBRisscheduledforend-January 2016 and is expected to kick off this activity. Revenue forecasting and impact analysis, including taxexpenditureanalysis,willcommenceinFebruary2016.

ContinuesupportingtheTaxPolicyReformUnitofPunjabandimplementingtheagreedworkprogramwiththePRA.

FieldamissiononpropertytaxinJanuary2016andholddiscussionswiththeSecretaryExciseandTaxationandtheBoardofRevenuetoimplementtheworkprogramwithastrongfocusontaxlitigation,internalaudit,agriculturalincometaxandproperty tax, business process reengineering, and the development and implementation ofmanagement informationsystems.


Disbursements Commitments Forecasted

0.26 0.06 0.65

Sr# Activities Type(BE/RE)

Amount(US$

million) StartDate EndDate Status

1 ScopingmissionsforfederalandSindhgovernments BE 0.021 10-Feb-15 31-Dec-15 Completed

2 Supervisionmissions BE 0.044 10-Feb-15 31-Dec-15 Completed

3 Strengthenthemiddle-of�icefunctionsofDPCO BE 0.025 10-Feb-15 31-Dec-15 Completed

4 TrainingonMTDS,DeMPA/representationonDMFForum BE 0.015 1-Jun-15 31-Dec-15 Completed

5 SindhDMSmission-PhaseI BE 0.025 20-Jul-15 15-Aug-15 Completed

6 Sindhcapacity-buildingtrainingmission-PhaseI BE 0.015 1-Aug-15 2-Sep-15 Completed

7 UpdatingMTDSmission BE 0.010 25-Sep-15 10-Oct-15 Completed

8 ScopingmissionforPunjab BE 0.010 5-Oct-15 10-Oct-15 Completed

10 Misc. BE 0.003 10-Feb-15 31-Dec-15 Completed&committed

11 Consultantfees BE 0.143 10-Feb-15 30-Jun-16 Completed&ongoing

0.320


Amount(US$


1 ScopingofEFWingactivitiesmission BE 0.020 1-Jan-16 31-Mar-16 Forecasted

2 SupervisionmissionstoPESandKarachi BE 0.020 1-Jan-16 31-Mar-16 Forecasted

3 ScopingmissiontoPES BE 0.020 1-Jan-16 31-Mar-16 Forecasted

4 Stafftraning/missions BE 0.020 1-Jan-16 31-Mar-16 Forecasted

5 Sindhproceduremanual(3missions) BE 0.015 1-Jan-16 31-Mar-16 Forecasted

6 Trainingonsub-nationalDebtManagement(2missions) BE 0.020 1-Jan-16 31-Mar-16 Forecasted

7 SindhDMSmission-PhaseII BE 0.030 1-Jan-16 31-Mar-16 Forecasted

8 SNFRLmissiontoKHI BE 0.012 1-Jan-16 31-Mar-16 Forecasted

BETF 2170,000 1-Jan-16 31-Mar-16

RETF 434,210 1-Jan-16 31-Mar-16

PlannedActivities(Forecasted)-December2015

Completed/Ongoing/CommittedActivities

Grant(US$million)

1.13

ChildTF

DebtManagementReforms

Total

Balance

0.16

9 Stafftrainings/missions BE 0.009 22-Nov-15 20-Dec-15 Completed

9 Consultantfees BE 0.050 1-Jan-16 31-Mar-16 Forecasted

10 Misc. BE 0.010 1-Jan-16 31-Mar-16 Forecasted

11 GoPGrantAgreement(RETFwithMoF) RE 0.434 1-Jan-16 31-Mar-16 Forecasted

0.651Total



Amount(US$


1 Overallsectorreformsupport:Reformimplementationassessment,supervisionmissionsand

programmanagement BE 0.08 1-Oct-14 31-Dec-15

2 SupporttoMWP:Supportinreviewingdraftmarketrules,CPPA-GseparationandNTDC

licensemodi�ication BE 0.07 1-Oct-14 31-Dec-15

3 SupporttoPC:Internationalexpertswithextensiveexperienceindistributionprivatizations,

roundtableondistributionprivatization BE 0.11 1-Dec-14 Continuing

4 SupporttoNEPRA:Adviceonmarketoperatorrulesandcommercialcode;internationalexperts

advisorysupporttoonMulti-YearTariffsindistribution,retail,communicationsandoutreach. BE 0.12 1-Jun-15 Continuing

5 SupporttoMPNR:Internationalexpertongastradingandmarkets,gassectormissionreviewinggasmarketdevelopments,LNGimportplansandpipelinedevelopments. BE 0.10 1-May-15 31-Dec-15

6 PunjabEE:IFCadvisorysupporttoPunjabgovernmenttodevelopa�ive-yearEEstrategyBE 0.00 1-Oct-14 31-Dec-15

Subtotal 0.48


Amount(US$


1 Overallsectorreformsupport:Supervisionmissions BE 0.03 3-Sep-15 31-Dec-15

2 MPNR:Studyongassectorstructureandtransmissiondevelopment,continueddiscussions

PC:Advisorysupportonprivatizationplan,continuingcapacitybuildingandknowledge

BE 0.25 3-Sep-15 1-Jun-16

3

NEPRA:Internationalexpertonregulatoryreform,internationaltariffadvisor BE 0.05 3-Sep-15 1-Jun-164

Punjab:SupporttodevelopmentofanEEstandardsandlabelingprogramforindustry BE 0.20 3-Sep-15 1-Mar-17

0.560

PlannedActivities(ForecastedDisbursements)-Jan-Mar2016

Total

Activities(completed/ongoing/committed)


1.15 0.56

ChildTF Grant(US$inmillions)

EnergySectorReforms 2.25 0.48

Balance(Grant-Disbursed-

0.63

Commitment-Forecasted)

0.568 0.361.45 0.48 0.38

0.58 0.200.8 0 0.22

WB(TF019264)

IFCEE(TF0A1194)

FundstransfertoIFCcompletedinNovember2015.

onLNG

exchangeevents

5(motorsandfans),andbroadereconomy-wideEEprogram

BE 0.04 3-Sep-15 1-Mar-16

FirmcontractedtoprovidedesignandimplementationsupporttoPunjabEnergyDepartmentinadoptingEEstandardsandlabeling.

Note:Theforecastsprovidedhereareforplanneddisbursements.The�iguresdonotincludeplannedcommitments,asmostoftheanticpateddisbursementsinthenextquarterwillbeoutofexistingcommitments,withtheexceptionofline#1.

The�iguresinthissectionshowdisbursementsbyactivity.Commitmentsareshowninaggregate,above,basedoninformationfromtheTFsystem

Note:toavoiddoublecountingplanneddisbursements(includedinthecommitment�igures),thiscalculationforthebalanceisbasedon(granted-disbursed-commitmentedamounts)toshowexpectedfundbalanceafterdisbursementforecasts(fromexistingcommitments)materialize.TheonlyexceptionistheWBGline#1,forexpecteddisbursementsonsupervisionmissions,whichhavenotbeenincludedinthecommitments.


Disbursements Commitments ForecastedGrant(US$inmillions)EnergySectorReformSupport

Balance(Grant-Disbursed-Commitment-Forecasted)

0.58 0.200.8 0 0.22IFCEE(TF0A1194)

0.58 0.200.8 - 0.22

Note:toavoiddoublecountingplanneddisbursements(includedinthecommitment�igures),thiscalculationforthebalanceisbasedon(granted-disbursed-commitmentedamounts)toshowexpectedfundbalanceafterdisbursementforecasts(fromexistingcommitments)materialize.TheonlyexceptionistheWBGline#1,forexpecteddisbursementsonsupervisionmissions,whichhavenotbeenincludedinthecommitments.


Amount(US$


1 Overallsectorreformsupport:Reformimplementationassessment,supervisionmissionsand

programmanagement BE 0.08 1-Oct-14 31-Dec-15

2 SupporttoMWP:Supportinreviewingdraftmarketrules,CPPA-GseparationandNTDC

licensemodi�ication BE 0.07 1-Oct-14 31-Dec-15

3 SupporttoPC:Internationalexpertswithextensiveexperienceindistributionprivatizations,

roundtableondistributionprivatization BE 0.11 1-Dec-14 Continuing

4 SupporttoNEPRA:Adviceonmarketoperatorrulesandcommercialcode;internationalexperts

advisorysupporttoonMulti-YearTariffsindistribution,retail,communicationsandoutreach. BE 0.12 1-Jun-15 Continuing

5 SupporttoMPNR:Internationalexpertongastradingandmarkets,gassectormissionreviewinggasmarketdevelopments,LNGimportplansandpipelinedevelopments. BE 0.10 1-May-15 31-Dec-15

6 PunjabEE:IFCadvisorysupporttoPunjabgovernmenttodevelopa�ive-yearEEstrategy

BE 0.00 1-Oct-14 31-Dec-15

Subtotal 0.48


FundstransfertoIFCcompletedinNovember2015.Strategydeveloped.PunjabEEAgencyandaSupervisoryBoardestablishedtoimplementthestrategy.TrainingprovidedtomembersoftheSupervisoryBoard.



Amount(US$


1 Overallsectorreformsupport:Supervisionmissions BE 0.00 3-Sep-15 31-Dec-15

2 MPNR:Studyongassectorstructureandtransmissiondevelopment,continueddiscussions

PC:Advisorysupportonprivatizationplan,continuingcapacitybuildingandknowledge

BE 0.25 3-Sep-15 1-Jun-16

3

NEPRA:Internationalexpertonregulatoryreform,internationaltariffadvisor BE 0.05 3-Sep-15 1-Jun-164

Punjab:SupporttodevelopmentofanEEstandardsandlabelingprogramforindustry BE 0.20 3-Sep-15 1-Mar-17

0.530

PlannedActivities(ForecastedDisbursements)-Jan-Mar2016

Total

onLNG

exchangeevents

5(motorsandfans),andbroadereconomy-wideEEprogram

BE 0.04 3-Sep-15 1-Mar-16

FirmcontractedtoprovidedesignandimplementationsupporttoPunjabEnergyDepartmentinadoptingEEstandardsandlabeling.


Amount(US$


1 Athree-daygovernmentperformancemanagementworkshopwasconductedforatotalof50

seniorgovernmentof�icials.AperformancemanagementexpertfromIndiawasengagedas

theresourceperson.Theparticipants'grouprepresenteddifferentdepartments,including

theKarachiPortTrust,NationalAccountabilityBureau,FederalBoardofRevenue,Ministryof

InformationTechnologyandTelecommunication,andNationalDatabaseandRegistration

Authority. BE 0.03 May-15 May-15 Completed

2 Atotaloftwosenioradvisorsanda�inancialevaluationexpertwereengagedtoadvisethePC

ontransactions.Anin-housesenioradvisorhasbeenengagedtoprovidestrategicinputand

shareknowledgeontheprivatizationofthepipeline.Asecondsenioradvisorhasbeen

engagedbytheWBGtocommentontheoverallprogressandef�icacyoftheprivatization

program.Thein-house�inancialevaluationexpertsharesbestpracticesonvaluationmodels. BE 0.05 Jul-15 Jun-16

3 Donorcoordinationmeetingswereheldonprivatizationandcorporategovernanceinpublic

sectorenterprises.Theobjectiveofthesemeetingswastoensuretherewasnoduplication

andtodevelopacohesiveapproachtodonorassistance. BE 0.01 Feb-15 Jun-15

4 Asenior�inancialsectorexpertwasengagedtohelpimplementtheBETF. BE 0.025 Jul-15 Jun-16

5 WBG’sLeadAirTransportSpecialist'smissiontoPakistantoassistandadvisethePCon

privatizingPIA.TheSpecialistsharedknowledgeontransactionmodelsforprivatizingan

aviationenterprise. BE 0.05 Aug-15 Sep-15 Completed

6 WBG'sSeniorPublic-PrivatePartnershipexpert'smission(August–September2015)to

developaworkprogramfortheFund'spublic-privatepartnershipcomponent. BE 0.05 Aug-15 Sep-15 Completed

7 Aninvestors'conferenceshowcasingthepowersectorwasheldinWashington,DC

(October2015)forPCstaff.Alongwithpotentiallocalandinternationalinvestors,key

governmentcounterparts(suchasNEPRA,theWAPDA,CivilAviationAuthority,etc.)BE 0.03 Oct-15 Nov-15 Completed



0.49 0.1670 0.3

ChildTF Grant(US$million)

SOEandPrivatizationSectorReforms 0.75


-0.22


particpated.

8 Atwo-daytrainingworkshopforPCof�icialswasheldinWashington,DC(October2015)

toshareinternationalexperienceandlearnfromcasestudiesonpowersectorprivatizations. BE 0.05

Sep-15 Jun-16

9 Twopublicsectorenterprisecorporategovernanceconsultantshavebeenengagedforthe

SecuritiesandExchangeCommissionofPakistan(September2015)tobuilditscapacity

toimplementthePublicSectorCompanies(CorporateGovernance)Rules,2013. BE 0.03

Oct-15 Oct-15

10 Afollow-upGovernmentPerformanceManagementworkshopwasorgranisedbytheEstablishmentDivisioninAJK.TheWorldBankprovidedsupportbyprovidingaSubject

MatterExpertfromthetheGovernmentofIndia(Mr.NazrulIslam)wholedBangladesh's

BE 0.01

Dec-15 Dec-15

effortsinthis�ield.Mr.IslamalsometwiththeMinisterPlanningandthePlanningMember

11 WBG'sSeniorPublic-PrivatePartnershipexpert'smission(December2015)tofurther

developtheworkprogramfortheFund'spublic-privatepartnershipcomponent.

Themissionalsohadaprivatizationcomponenttofollow-uponlearningfromtheBE 0.05InvestorConference.

forGovernancewhilehewasinPakistan. Completed

12 ThefourthDonorCoordinationMeetingwasheldtoupdatedonorsontheInvestorConference

andsharedevelopmentsonworkprogramwithPC BE 0.005 Nov-15 Nov-15

Oct-15 Nov-15

0.66

Completed

Completed

Completed



Amount(US$


1 CompetitonMission:AmissionwillvisitPakistanfor10workingdaysforaninitialscoping

missionforcapacitybuildingoftheCompetionCompetitionofPakistan(CCP).Themission

willalsoincldudetrainingsofCCPenforcmentstaff,judicairyandprivatization

commissionstaff. BE 0.1 Feb-16 Mar-16

2 SOECorporateGovernanceMission:AmissionwillvisitPakistaninMarch2016toassess

PrivatizationCommunicationsseminars:Seminarswillarrangedtocreatebroadbased

theimplmentationofthePSECorporateGovernanceRules(2013).Themisisonwillwork

BE 0.075 Mar-16 Mar-16

3

SeniorAdvisoronRETFdesign/implementationandPPP:TheAdvisorwillbeengagedto

developtheRETFwork-programatthePCandalsoimplementthePPPdiagnostictoolkit.

4

DonorCoordinationMeeting:A5thDonorCoordinationmeetingwillbeorganisedtofacilateBE 0.005 Feb-16 Feb-16

0.3

Activities(planned/forecasted)-March2016

closelywithSECPtoconducttrainingsontheRulesforkeylineministries.

understandingonprivatizationanditsimpacts.Internationalbestpracticeswillbesharedwithrelevantjounalists,parlimentariansandotherkeystakeholders.

5donordialogueandsharedlearnings.

BE 0.1 Jun-16

BE 0.03 Jan-16

Mar-16

Jun-16

Disbursed Commitments Forecast

139,966.50 0.00 236,033,500IFCActivityunderSOE&PPP

Grants(US$million)

0


2,360,033.50


JPCL GEPCOConsultant JPCLDisbursements GEPCODisbursements

200,000 170,000LegalConsultant 81,916.50 58,050.00

500,000 410,500TechnicalConsultant

120,000 224,550AccountingConsultant

820,000 805,050CommittedAmounts

200,000 200,000AdditionalConsultants(PRConsultant)

1,020,000 1,005,050Sub-total

2,025,050Total474,950Contingenciesestimated

2,500,000Totalallocation 81,916.50 58,050.00

1



0.73 0.47 2.22


Amount(US$


1 Taxaudit BE $0.21 1-Sep-15 31-Dec-15

2 Taxlitigation/appeals BE $0.13 21-Sep-15 31-Dec-15

3 Taxpolicy BE $0.18 1-Sep-15 31-Dec-15

4 Projectmanagement,Bankstaffworkinginallareasofproject BE $0.24 1-Sep-15 31-Dec-15

5 ITstrategyteam BE $0.11 1-Sep-15 31-Dec-15

6 Legaldraftingworkshop BE $0.07 1-Sep-15

7 FunctionalreviewFBR/PRA,ITassessment,projectpreparation/concept BE $0.26 2-Sep-15

Total $1.20


Amount(US$


1 Taxaudit BE $0.21 1-Sep-15 31-Dec-15

2 Taxlitigation/appeals BE $0.13 21-Sep-15 31-Dec-15

3 Taxpolicy BE $0.18 1-Sep-15 31-Dec-15

4 Projectmanagement,Bankstaffworkinginallareasofproject BE $0.24 1-Sep-15 31-Dec-15

5 RegionalworkshopinSindh BE $0.15 3-Oct-15 10-Oct-15

6 Decembereventontaxation BE $0.20 1-Dec-15 8-Dec-15

7 ITstrategyteam BE $0.11 1-Sep-15 31-Dec-15

8 ICTneedsPRAL/FBR RE $1.00 1-Nov-15 31-Dec-15

Total $2.22

PlannedActivities(Forecasted)-December2015

ChildTF Grant(US$million)

TaxandTradeTariffReforms 3.42



-



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