Property tax collection in Karachi is set to receive a major institutional and financial push after the World Bank approved a $150 million programme to help the Sindh government raise more revenue from the city’s property base. The programme, known as the Sindh Property Revenues Enhancement Programme (Sindh PREP), was cleared by the World Bank’s board of executive directors, the bank’s resident mission in Islamabad announced on Saturday.
According to the announcement, the initiative will support the provincial government in improving the collection of urban immovable property tax (UIPT) and in strengthening the capacity of selected local councils to deliver municipal services. It will cover Karachi’s 25 local councils, and the World Bank identified the 3.58 million people living in those councils as its primary beneficiaries, since service delivery investments will be financed there.
Why Property Tax Collection in Karachi Matters
The World Bank framed the programme around a structural weakness in local finance. Bolormaa Amgaabazar, the bank’s Country Director for Pakistan, noted that Sindh’s local councils currently depend on provincial transfers for more than 95 per cent of their revenues. In her view, cities able to raise their own revenues are better placed to plan and invest for the long term, and helping Karachi collect property taxes from its residents and businesses, then reinvest most of the proceeds locally, would give Sindh’s cities the means to finance the infrastructure they need.
Davison Muchadenyika, a senior urban development specialist at the bank, said Karachi has significant untapped potential to generate revenue from its property base. He argued that the programme would help Sindh strengthen its fiscal sustainability so that cities can plan, invest and deliver services from their own resources.
Reinvestment in Municipal Service Delivery
A central feature of the design is a reinvestment rule. About 70 per cent of the urban immovable property tax revenue collected will be channelled directly into municipal infrastructure and services in the participating local councils. The arrangement is intended to give residents a visible link between the taxes they pay and the quality of municipal service delivery they receive, a link that has often been weak in a city where services are split among several authorities.
Financing details reported elsewhere give a clearer picture of how the money is structured. Business Recorder reported that the package comprises $110 million under a Programme-for-Results component and $40 million in investment project financing. The same outlet reported that the programme aims to raise property tax collection across Karachi’s 25 town municipal corporations from Rs2.3 billion to Rs25.5 billion. The World Bank has also noted in its project documentation that Pakistan’s property tax revenue remains significantly underutilised at roughly 0.13 per cent of GDP, according to a report by Zameen.com on the bank’s project papers.
Digitisation and Reform Already Under Way
The approval follows steps the Sindh government has already taken to modernise property revenue systems. In April 2026, the province began collecting immovable property tax through the Board of Revenue’s e-Stamping platform, which is operated by the Sindh Information Technology Company. Under that arrangement, the tax is generated automatically with the e-Stamping challan at one per cent of the total property value, with no separate challan required. Local Government Minister Nasir Shah said at the time that the move would enhance transparency and help eliminate corruption.
Dawn reported then that, since the company took over operational control of the platform in September 2025, it had processed more than one million challans and collected over Rs18 billion through 431 bank branches across Sindh. The province’s cabinet-level and development approvals for Sindh PREP have since proceeded, with the Central Development Working Party also clearing the programme with its $150 million of World Bank financing.
Challenges That Remain
The programme’s success will depend on how effectively assessments, collection and enforcement are improved, and on whether residents see tangible service improvements in return. Property tax has been a contentious subject in Karachi, where residents of different zones have complained in the past about uneven rates and the absence of a clear rationale for assessments. A transparent system and a credible reinvestment mechanism may therefore prove as important as the financing itself.
For now, the approval gives the Sindh government a defined framework and substantial external funding to expand property tax collection in Karachi and to build the capacity of its local councils to spend the proceeds on the services residents expect.
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