World Bank Backs $150m Karachi Property Tax Plan
The World Bank has approved a $150 million programme to help the Sindh government improve Karachi property tax collection and strengthen municipal services in the city. The programme will benefit Karachi’s 25 local councils, where 3.58 million people live, and it aims to turn property taxes into a reliable source of money for local services.
The Sindh Property Revenues Enhancement Programme, known as Sindh PREP, was approved by the World Bank board of executive directors. The World Bank resident mission in Islamabad announced the approval on Saturday. The programme will support the Sindh government in improving urban immovable property tax collection, known as UIPT, and in building the capacity of selected local councils to deliver municipal services.
Karachi property tax: what the programme covers
Sindh PREP has two linked goals. The first is to collect property tax more fully and fairly across Karachi’s 25 local councils. The second is to spend that money where it is raised, on the streets, drains, water and other services that residents use every day.
About 70 percent of the UIPT revenues collected under the programme will be reinvested directly into municipal infrastructure and services in the participating local councils. That rule matters because it ties tax collection to visible results. A council that collects more will have more to spend on its own area, and residents will be able to judge whether the money made a difference.
The programme’s primary beneficiaries are the 3.58 million people living in the 25 councils. Service delivery investments in those councils will be financed through the programme, giving local bodies a funding stream beyond the provincial transfers they now rely on.
For Karachi, the shift is significant. The city has a large property base, from homes and shops to offices and warehouses, yet much of that base contributes little in tax. Better records, fairer valuations and steadier collection could change that picture without raising tax rates. The programme’s design points in that direction, since it focuses on collection and capacity rather than new taxes.
Why councils need their own revenue
“Cities that can raise their own revenues can plan and invest for the long term,” said Bolormaa Amgaabazar, World Bank Country Director for Pakistan. She noted that Sindh’s local councils depend on provincial transfers for more than 95 percent of their revenues, a dependence that leaves them little room to plan ahead.
“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 point is straightforward. A council that waits for transfers from the province cannot set its own priorities with confidence. Money may arrive late, or it may fall short of what was promised. A council with its own revenue can plan road repairs, drainage work and water supply over years rather than months, and it can answer to its own residents for results.
Davison Muchadenyika, a senior urban development specialist at the World Bank, said Karachi has significant untapped potential to generate revenues from its property base. “This programme will help Sindh strengthen fiscal sustainability enabling cities to plan, invest, and deliver services from their own resources effectively,” he said. In other words, the goal is not a one-time grant, but a system that keeps generating money for services long after the programme ends.
What residents should watch next
What is Sindh PREP?
Sindh PREP is the Sindh Property Revenues Enhancement Programme, a $150 million World Bank programme to improve urban property tax collection and municipal service delivery in Karachi’s 25 local councils.
How much of the tax money stays local?
About 70 percent of the UIPT revenues collected under the programme will be reinvested directly into municipal infrastructure and services in the participating local councils.
Who benefits from the programme?
The primary beneficiaries are the 3.58 million people living in Karachi’s 25 local councils, where service delivery investments will be financed through the programme.
Why does Karachi need its own revenue?
Sindh’s local councils depend on provincial transfers for more than 95 percent of their revenues, according to the World Bank. Own revenues would let cities plan and invest for the long term instead of waiting on transfers.
