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Sindh govt, WB agree to devolve property tax to DMCs.

The Sindh government in collaboration with World Bank has decided to devolve property tax collection to the local bodies, DMCs for which a proper database and capacity building of local bodies staff concerned would be undertaken shortly.

This decision was made by Sindh Chief Minister Syed Murad Ali Shah in a meeting he held with a World Bank team led by senior economist Ms Yoonhee Kim, Urban development Specialist Mr Shoaib Athar, Public Sector Specialist Irum Touqeer, Urban development Specialists Takaaki Masaki and others.

The Sindh government delegation was led by the CM Sindh, comprising Minister Local Government Jam Khan Shoro, Mayor Karachi Waseem Akhter, Principal Secretary to CM Sohail Rajput, Secretary Excise Haleem Shaikh, Chairman DMCs and others.

The Sindh CM in his opening remarks said that he had already devolved property tax to local bodies in Karachi KMC but they have to develop a system for collection. He added that property survey of Sukkur has been conducted.

It is interesting to note that earlier there were only 35,000 households registered for collection of property tax but the fresh survey has revealed an amazing figure of 65,000 houses fit for levy of property tax.

The World bank team through a presentation said that the current collection of property tax in Sindh is Rs2 billion while there was a potential of Rs 7.2 billion.

Citing the examples of Punjab, they said that they collected $88 million during 2015-16, Chennai collected $90 million, Indian Hyderabad collected $179 million, Banglore $201 million and Mumbai $373 million.

These figures are enough to assess how much Karachi in terms of its size and household can collect property tax, they said.

The world bank said that the tax base has been eroded by virtue of very generous exemptions.

It was also pointed out that the administration of property tax is based on 'old' system technology, current billing system is not fit-for-purpose.

They recommended a self-assessment and self-payment platform for property tax customers is need of the hour.

The property tax arrears constitute a major problem and significant loss of revenue.

The World Bank suggested devolution of Urban Immovable Property Tax (UIPT) to local bodies, DMC.

On this, the CM Sindh said that the local councils of Karachi - DMCs do not yet have the capacity to administer UIPT collection functions, in the absence of staff trained in property tax law and procedures, and there are lack of IT capabilities.

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Publication:Pakistan Observer (Islamabad, Pakistan)
Date:Mar 16, 2018
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