The World Bank's Board of Executive Directors has approved $150 million in financing for a programme to improve property tax collection and municipal services in Sindh, with Karachi at its centre. The Sindh Property Revenues Enhancement Program, known as Sindh PREP, was approved on Saturday 31 October, according to the World Bank's news release.

The programme aims to raise Karachi's annual urban immovable property tax collection from about $8.5 million to $85 million, by lifting compliance from 20 per cent to 50 per cent. Karachi is one of the world's largest cities, yet collects far less property tax than comparable cities, which collect between 82 and 350 times more, the World Bank said.

Most revenue reinvested locally

About 70 per cent of the property tax revenue collected will be reinvested directly in municipal infrastructure and services in participating councils. The programme covers Karachi's 25 local councils and is expected to directly benefit 3.58 million people, while funding awards for councils will depend on annual performance assessments by an independent verification agent.

World Bank Country Director for Pakistan Bolormaa Amgaabazar said Sindh's local councils currently depend on provincial transfers for more than 95 per cent of their revenues, limiting their ability to plan and invest for the long term. A further $40 million investment component will expand property surveys and tax administration to 20 local councils in other urban centres of Sindh, indirectly benefiting around 4.5 million people.