World Bank approves $150mn programme to boost property tax collection, services in Sindh

ISLAMABAD: The World Bank has approved USD150 million in financing for a programme aimed at improving property tax collection and strengthening municipal services in Sindh, with a particular focus on Karachi.

The World Bank Group’s Board of Executive Directors approved the Sindh Property Revenues Enhancement Programme (Sindh PREP) on October 31, 2026. The initiative will support the Sindh government in increasing urban immovable property tax (UIPT) collection and improving the capacity of selected local councils to deliver essential services.

According to WB’s statement, Karachi currently collects approximately USD8.5 million annually in property tax, despite being one of the world’s largest cities. According to the World Bank, cities of comparable size collect between 82 and 350 times more in property taxes.

Under the programme, Karachi’s annual property tax collection is expected to increase tenfold to USD85 million, while compliance is projected to rise from 20 per cent to 50 per cent.

The initiative will seek to improve tax administration, collection and compliance through measures including the introduction of a property tax management information system to handle billing, payment processing and complaints. Integrated financial management information systems will also be introduced across participating local councils.

Around 70 per cent of the property tax revenue collected will be reinvested directly in municipal infrastructure and services in the participating councils.

“Cities that can raise their own revenues can plan and invest for the long term,” said Bolormaa Amgaabazar, the World Bank’s country director for Pakistan.

She said Sindh’s local councils currently depended on provincial transfers for more than 95 per cent of their revenues. The programme would help Karachi collect property taxes from residents and businesses and channel most of the proceeds back into local services, giving cities greater capacity to finance infrastructure, she added.

The programme will cover Karachi’s 25 local councils, with 3.58 million residents identified as its primary beneficiaries. Funding will be linked to performance, with annual assessments by an independent verification agent determining the allocations each council receives.

The funds will support the rehabilitation of climate-resilient municipal infrastructure and services, including drainage and sewerage systems, schools, fire stations, roads and street lighting.

A separate USD40 million investment project financing component will extend property surveys and tax administration to 20 local councils in other urban centres across Sindh. The expansion is expected to indirectly benefit around 4.5 million people.

World Bank’s senior urban development specialist, Davison Muchadenyika said Karachi had significant untapped potential to generate revenue from its property base and use those resources to meet the infrastructure needs of residents and businesses.

He said the programme would help strengthen Sindh’s fiscal sustainability and enable cities to plan, invest and deliver services more effectively using their own resources.