- Programme targets improved property tax collection.
- Karachi’s annual property tax target rises to $85m.
- 70% of property tax revenue to fund local services.
The World Bank has approved $150 million in financing for a programme aimed at improving urban property tax collection and strengthening municipal service delivery in Sindh.
The World Bank Group’s Board of Executive Directors approved the financing for the Sindh Property Revenues Enhancement Program (Sindh PREP) on October 30, a statement read.
“Cities that can raise their own revenues can plan and invest for the long term,” said Bolormaa Amgaabazar, World Bank Country Director for Pakistan.
“Today, Sindh’s local councils depend on provincial transfers for more than 95% of their revenues. By helping Karachi collect the property taxes from its residents and businesses, and by reinvesting most of that revenue in local services, this programme will give Sindh’s cities the means to finance the infrastructure they need,” she added.
The Sindh PREP will support the provincial government in improving urban immovable property tax (UIPT) collection and strengthening municipal service delivery capacity in selected local councils.
Despite being one of the world’s largest cities, Karachi currently collects only around $8.5 million annually in property tax, while cities of similar size collect between 82 and 350 times more.
The programme aims to increase Karachi’s annual property tax collection to $85 million and raise compliance from 20% to 50%.
It will achieve this by strengthening property tax collection, compliance and administration, including through the introduction of a UIPT management information system for billing, payment processing and grievance redress. Integrated financial management information systems will also be rolled out across local councils.
Around 70% of the collected property tax revenue will be reinvested directly into municipal infrastructure and services in participating local councils.
The programme will benefit Karachi’s 25 local councils, with 3.58 million people living in these areas identified as its primary beneficiaries.
Funding will be linked to results, with annual performance assessments conducted by an Independent Verification Agent determining the awards each council receives.
These awards will finance the rehabilitation of climate-resilient municipal infrastructure and services, including drainage, sewerage, schools, fire stations, roads and street lighting.
The programme also includes a $40 million Investment Project Financing component to expand property surveys and property tax administration to 20 local councils in other urban centres of Sindh.
Around 4.5 million people in these areas are expected to benefit indirectly.
