Summary：**World Bank backs PRA tax reforms, boosting confidence in economic recovery***Introduction* The Wo

**World Bank backs PRA tax reforms, boosting confidence in economic recovery**

*Introduction*
The World Bank announced its support for a series of tax reforms proposed by the country’s Public Revenue Authority (PRA), signaling a vote of confidence in the nation’s fiscal strategy and its potential to spur a broader economic rebound. The endorsement, delivered during a virtual briefing on Tuesday, highlights the institution’s belief that targeted tax adjustments can improve revenue stability while encouraging private‑sector investment.

*Key Developments*
Under the PRA’s plan, corporate tax rates for small and medium‑sized enterprises will be reduced from 22 % to 18 %, while a new digital services tax will be introduced to capture revenue from fast‑growing online platforms. Additionally, the authority proposes a phased increase in the value‑added tax threshold, exempting businesses with annual turnovers below $150,000 from VAT registration. World Bank economists said the measures aim to broaden the tax base, reduce compliance costs, and discourage informality. The bank pledged technical assistance worth $120 million over the next three years to help implement the reforms, including capacity‑building for tax administrators and upgrades to digital filing systems.

*Industry Analysis*
Analysts note that the reforms address two chronic challenges: a narrow tax base that hampers fiscal resilience and a competitive disadvantage for domestic firms facing multinational rivals. By lowering rates for SMEs, the policy could stimulate job creation in manufacturing and services, sectors that together account for roughly 45 % of national employment. The digital services tax, meanwhile, aligns the country with OECD recommendations and may deter profit‑shifting practices. However, some business groups warn that the VAT threshold increase could reduce government receipts in the short term if not paired with stronger enforcement against evasion. The World Bank’s endorsement is expected to lower sovereign risk premiums, potentially decreasing borrowing costs by 15‑20 basis points, according to preliminary market reactions.

*Future Outlook*
If the PRA successfully enacts the reforms by the end of the fiscal year, the World Bank projects a gradual rise in tax‑to‑GDP ratio from 13.5 % to 15.2 % by 2027, providing additional fiscal space for infrastructure and social programs. The institution also anticipates a modest uplift in GDP growth, forecasting an average annual increase of 0.3‑0.5 percentage points over the medium term, driven by