WB approves $150 mln programme to boost municipal revenues, services in Sindh

ISLAMABAD, Oct 31 (APP):The World Bank Group's Board of Executive Directors has approved $150 million in financing for a programme aimed at improving urban property tax collection and strengthening municipal service delivery in Sindh, particularly Karachi. The Sindh Property Revenues Enhancement Program (Sindh PREP) would support the provincial government in improving urban immovable property tax (UIPT) collection and strengthening the service delivery capacity of selected local councils, a WB news release said on Saturday. 'Cities that can raise their own revenues can plan and invest for the long term,' World Bank Country Director for Pakistan Bolormaa Amgaabazar said. She said Sindh's local councils currently depended on provincial transfers for more than 95 per cent of their revenues. By helping Karachi collect property taxes from residents and businesses and reinvesting most of the revenue in local services, the country director said, the programme would enable cities to finance the infrastructure they needed. Despite being one of the world's largest cities, Karachi currently collects only around $8.5 million annually in property taxes, while cities of comparable size collect 82 to 350 times more. The programme aims to increase Karachi's annual property tax collection to $85 million by raising compliance from 20 to 50 per cent. It would strengthen tax collection, compliance and administration through a property tax management information system covering billing, payment processing and grievance redress, alongside integrated financial management information systems across local councils. About 70 per cent of the collected property tax revenue will be reinvested directly in municipal infrastructure and services in participating local councils. The programme would benefit Karachi's 25 local councils, covering 3.58 million people. Its performance-based financing mechanism would link funding to annual assessments conducted by an Independent Verification Agent, with the resulting allocations used to rehabilitate climate-resilient municipal infrastructure and improve services. The investments would cover drainage, sewerage, schools, fire stations, roads and street lighting. The programme also includes a $40 million Investment Project Financing component to expand property surveys and property tax administration to 20 local councils in other urban centres of Sindh, indirectly benefiting around 4.5 million people. '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,' said Davison Muchadenyika, Senior Urban Development Specialist at the World Bank. He said the programme would help Sindh strengthen fiscal sustainability, enabling cities to plan, invest and deliver services effectively through their own resources.