World Bank Approves $150M to Boost Sindh Property Taxes and Municipal Services

Sindh’s local councils depend on provincial transfers for more than 95 percent of their revenues, limiting their ability to finance services from money they collect themselves.

The World Bank Group's Board of Executive Directors has approved US$150 million for a programme to improve urban property tax collection and strengthen municipal services in Pakistan's Sindh province. The Sindh Property Revenues Enhancement Program, known as Sindh PREP, will help local councils collect more revenue and use a substantial share of those funds for infrastructure and public services. Its work will cover Karachi and support the expansion of property surveys and tax administration in other urban centres across Sindh.

Sindh's local councils depend on provincial transfers for more than 95 percent of their revenues, limiting their ability to finance services from money they collect themselves. Karachi currently raises approximately US$8.5 million annually in property tax, with cities of a similar size collecting between 82 and 350 times that amount. The programme targets an increase in Karachi's annual collection to US$85 million, supported by a rise in tax compliance from 20 percent to 50 percent.

The programme will benefit Karachi's 25 local councils, with service investments expected to directly benefit 3.58 million people living in those areas. About 70 percent of collected urban immovable property tax revenues will be reinvested directly in municipal infrastructure and services within participating councils. World Bank Country Director for Pakistan Bolormaa Amgaabazar said stronger local revenue collection would give cities greater capacity to plan for the long term and finance the infrastructure residents and businesses need.

Updated tax systems to improve collection and accountability

Sindh PREP will support the provincial government in strengthening urban immovable property tax collection, compliance and administration, giving councils better tools to manage their property tax base. A property tax management information system will handle billing, payment processing and grievance redress, helping authorities administer collections and respond to taxpayer concerns. Integrated financial management information systems will be introduced across local councils to strengthen their capacity to manage public finances and deliver municipal services.

Council funding tied to independently verified results

Funding awards for participating councils will depend on annual performance assessments conducted by an Independent Verification Agent, linking financial support to verified results. Councils will use these awards to rehabilitate climate-resilient infrastructure and services, including drainage, sewerage, schools, fire stations, roads and street lighting. The arrangement connects improvements in council performance with investment in facilities and services used by local communities.

Support to extend beyond Karachi into other Sindh cities

The programme includes a US$40 million Investment Project Financing component to expand property surveys and tax administration to 20 local councils in Sindh's other urban centres. This component is expected to indirectly benefit approximately 4.5 million people by supporting stronger property tax administration beyond Karachi. World Bank Senior Urban Development Specialist Davison Muchadenyika said tapping Karachi's property revenue potential would strengthen fiscal sustainability and help cities plan, invest and deliver services using their own resources.