World Bank approves $150 million for Sindh property tax programme
The World Bank's Board of Executive Directors has approved $150 million for the Sindh Property Revenues Enhancement Program. It aims to improve property tax collection and municipal services, mainly in Karachi.
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- World Bank board approves $150 million for Sindh PREP
- Goal is to raise Karachi's property tax collection from about $8.5 million to $85 million a year
- About 70 percent of collected revenue is to go back into local services
The World Bank Group's Board of Executive Directors has approved $150 million in financing for the Sindh Property Revenues Enhancement Program, known as Sindh PREP. The program is meant to improve urban property tax collection and strengthen municipal service delivery in Sindh. One broadcaster, 24NewsHD, described the amount as a grant, while the World Bank describes it as financing.
According to the reports, Sindh's local councils depend on provincial transfers for more than 95 percent of their revenues. Karachi currently collects around $8.5 million a year in property tax, while cities of comparable size collect 82 to 350 times more, according to a World Bank news release issued on Saturday.
The program targets raising Karachi's property tax compliance from 20 percent to 50 percent. That would lift annual collection in the city from $8.5 million to $85 million. It would be supported by a property tax management information system covering billing, payment processing and grievance redress, along with integrated financial management information systems across local councils.
About 70 percent of the property tax revenue collected will be reinvested in municipal infrastructure and services in the participating local councils. The investments would cover drainage, sewerage, schools, fire stations, roads and street lighting.
The program would benefit Karachi's 25 local councils, which cover 3.58 million people. Funding is performance-based, and the awards each council receives will depend on annual assessments by an Independent Verification Agent.
The program also includes a $40 million Investment Project Financing component. It will expand property surveys and property tax administration to 20 local councils in other urban centres of Sindh, indirectly benefiting about 4.5 million people.
World Bank Country Director for Pakistan Bolormaa Amgaabazar said: "Cities that can raise their own revenues can plan and invest for the long term." Davison Muchadenyika, Senior Urban Development Specialist at the World Bank, said: "Karachi has significant untapped potential to generate revenues from its property base and use those resources to fund the infrastructure its residents and businesses need."
Why it matters
The program targets property tax collection and municipal services in Karachi's 25 local councils, covering 3.58 million people, and in 20 other urban councils in Sindh.
