World Bank approves $150 million to boost property tax collection in Sindh
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The World Bank Group approved $150 million in financing for the Sindh Property Revenues Enhancement Programme (Sindh PREP) to improve urban property tax collection and municipal service delivery in Sindh, Pakistan.
The programme helps the provincial government improve urban immovable property tax (UIPT) collection and strengthens the capacity of local councils to provide municipal services. Currently, Karachi collects only about $8.5 million in annual property taxes, which is significantly lower than cities of similar size.
The initiative aims to increase this amount to $85 million per year and raise tax compliance from 20% to 50%. The World Bank says the project will use a management information system for billing and payment processing while rolling out integrated financial management systems across local councils. The project targets 25 local councils in Karachi, which will benefit approximately 3.58 million residents.
About 70% of the collected tax revenues will go directly into municipal infrastructure and services, such as drainage, sewerage, schools, fire stations, roads, and street lighting. An independent verification agent will conduct annual performance assessments to determine the funding awards each council receives for these climate-resilient projects. A separate $40 million Investment Project Financing component will expand property surveys and tax administration to 20 local councils in other urban centres across Sindh.
This part of the programme provides indirect benefits to about 4.5 million people. The World Bank states that the project will help cities move away from a reliance on provincial transfers, which currently provide more than 95% of their revenues, to allow them to fund their own infrastructure.
