The Board of Executive Directors of the World Bank has approved $150 million in financing to improve property tax collection and municipal services in Sindh, with a focus on Karachi.
The Sindh Property Revenues Enhancement Program (Sindh PREP) will help the provincial government raise collection of urban immovable property tax (UIPT) and strengthen the service delivery capacity of selected local councils, the World Bank said in a news release issued on Saturday.
The provicial capital currently collects about $8.5 million a year in property taxes, far below comparable cities. The programme aims to raise this to $85 million annually by increasing compliance from 20 to 50 per cent.
To achieve this, the programme will introduce a property tax management information system covering billing, payment processing and grievance redressal. It will also put integrated financial management systems in place across local councils.
About 70 per cent of the revenue collected will be reinvested in infrastructure and services across the 25 local councils in Karachi, benefiting around 3.58 million people. The funds will go towards drainage, sewerage, schools, fire stations, roads and street lighting, and will be tied to annual performance assessments.
The programme also includes a $40 million investment component to extend property surveys and tax administration to 20 local councils in other urban centres of Sindh. This is expected to indirectly benefit about 4.5 million people.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said the local councils depend on provincial transfers for more than 95 per cent of their revenues. She said the programme would help cities generate their own revenue and invest in infrastructure and essential public services.
World Bank Senior Urban Development Specialist Davison Muchadenyika said Karachi has significant untapped potential to earn revenue from its property base and use it to finance infrastructure and services.
