World Bank okays $150m plan to boost property tax collection in Karachi

The World Bank has granted $150 million for a program aimed at enhancing urban property tax collection and strengthening municipal services in Karachi, Pakistan. The Sindh Property Revenues Enhancement Programme (Sindh PREP) has been approved by the World Bank's executive directors and will benefit 25 towns within the city of Karachi.

This initiative will directly benefit around 3.58 million residents living in these local councils. The program's primary goal is to help Sindh's local councils raise their own revenues by improving the collection of urban immovable property tax (UIPT). Currently, over 95% of these councils' revenues come from provincial transfers.

By enabling Karachi's property tax collection and reinvesting most of the collected UIPT revenues into local services, the program aims to bolster the infrastructure needed by residents and businesses in the city. Approximately 70% of the UIPT revenues collected through this program will be reinvested directly into municipal infrastructure and services within the participating local councils.

Bolormaa Amgaabazar, the World Bank's Country Director for Pakistan, highlighted the importance of cities having the ability to generate their own revenues for long-term planning and investment. Davison Muchadenyika, a senior urban development specialist at the World Bank, emphasized that Karachi possesses significant untapped potential to generate revenues from its property base, which can be utilized to fund the necessary infrastructure for its residents and businesses.

This program will assist Sindh in enhancing fiscal sustainability by enabling cities to plan, invest, and deliver services effectively using their own resources.