Sindh CM orders devolution of property tax to KMC, DMCs in Karachi

KARACHI: Sindh Chief Minister Syed Murad Ali Shah has decided to devolve the collection of property tax in the city to the Karachi Metropolitan Corporation and District Municipal Corporations and constituted a ministerial committee to work out the devolution mechanism.

The decision to this effect was taken by the Sindh CM on Tuesday while presiding over a meeting to discuss and approve the World Bank-sponsored Modernisation of Urban Property Tax Administration and System here at the CM House. The meeting was attended by Minister Excise and Taxation Mukesh Kumar Chawla, Local Government Minister Nasir Hussain Shah, Chief Secretary Mumtaz Shah, Principal Secretary to the CM Sajid Jamal Abro, Secretary Investment Zahid Abbasi, Secretary Local Government Najam Shah and other concerned officers.

Under the World Bank-funded Competitive and Livable City of Karachi Project (CLICK), there is a component of Modernising Urban Property Tax Administration and System to be executed for US$0.4 million for identifying and digitisation of under-assessed and un-assessed properties’ records, so as to increase the tax base coverage, consequently, improve revenue collection of the property tax in the city.

The project includes procurement/development of a robust Urban Immovable Property Tax (UIPT) system to effectively identify and tax urban properties in Karachi and to strengthen the capacity of Excise and Taxation Department with modernisation of UIPT collection, including HR strengthening through trainings and provision of infrastructure, keeping in view long-term sustainability. Under the project, UIPT survey will be conducted for an estimated two million properties of Karachi for collection of quality data.

The CM said that the Urban Immovable property survey would improve the tax base and the GIS component would help urban planning authorities to plan and execute sustainable infrastructure. He added that it would automate the property tax assessment and printing of challans. It would also help in providing a GIS mapping framework for the identification of all land parcels and buildings.

The chief minister said that earlier, only 800,000 property units were being taxed for property and then their number increased to 947,424 and after a fresh survey, the number of the units increased by 111 percent to 2,000,000. He said that presently Rs1.72 billion were being collected as property tax from Karachi and after the survey, its collection would increase to Rs3.63 billion.

He directed the minister local government and minister excise to sit with the chief secretary and evolve a mechanism to devolve the property tax to the KMC and DMCs. “Let these agencies collect the tax on their own and utilise it for the development of the city,” he said.

The CM approved to carry out an All-Karachi properties survey to update the property tax database and also approved development and upgrading of Information Technology System to house the property tax database and provide related training. He ordered for strengthening of the local bodies and excise and taxation staff capacity on property administration.