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Property Tax and Urban Policy in Khyber Pakhtunkhwa

The Consortium for Development Policy Research (CDPR) in partnership with International Growth Center (IGC) and Sustainable Energy and Economic Development (SEED) organized its second session of its two-part webinar series to discuss ways of maximising provincial fiscal space by focusing on two specific taxes: sales tax on services and the urban property tax.
The event entitled, “Property tax and urban policy in KP” was held on Friday, July 24 from 6:00pm to 7.45pm (PST).
This webinar brought together senior policy makers, academics and practitioners to highlight international best practices, cross-country learnings and domestic experiences in Pakistan’s provinces of Punjab and Khyber Pakhtunkhwa focused on improving the structure, design and administration of property tax and its role in influencing urban policy. With expert insights of the following panelists, the policy talk highlighted broad policy recommendations for provincial governments.
1) Dr. Ali Cheema (Director Mahbub-ul-Haq Center LUMS, Senior Research Fellow, IDEAS and Lead Academic IGC) – moderated the discussion as well as describe the structure and design of urban property tax in Pakistan, highlighting its key weaknesses and suggesting interventions in design and governance to improve outcomes and provincial capacity to improve service delivery.
2) Mr. Hasaan Khawar (Team Leader, Sustainable Energy and Economic Development (SEED) Programme in KP) – outlined the ways in which the DFID-funded SEED programme is supporting or can support Government of Khyber Pakhtunkhwa for urban property tax reform in the province, and its importance for generating revenue and influencing urban policy while highlighting the stakeholders they are working with, as well as setting the context for the rest of the discussion.
3) Ms. Astrid Haas (Policy Director, IGC) – highlighted developing-country experiences with urban property tax and draw upon international best practices and solutions for its correct implementation.
4) Dr. Asim Ijaz Khwaja (Director, Center for International Development, Harvard Kennedy School and Lead Academic IGC) – highlighted the key learnings from his experience in urban property tax reform in Punjab, in close collaboration with the provincial government, key lessons and reform suggestions for improving property tax collection.
5) Dr. Mujtaba Piracha (Pakistan’s ambassador to the World Trade Organization) – referred to Punjab’s experience with implementing the urban property tax and key lessons for future reforms in Punjab and KP.
6) Mr. Ghazan Jamal (Senior Advisor, Excise and Taxation, Government of Khyber Pakhtunkhwa) – discussed the role of property taxes in the overall growth of Khyber Pakhtunkhwa’s urban centers, how the recent budget and initiatives reflect the government’s priorities in improving the performance of the property tax and reforms needed in this area especially to improve service delivery in cities.
7) Mr. Richard Ough (Senior Economist and Team Leader, Macroeconomic Stability and Growth, DFID Pakistan) – discussed how DFID views the role of provincial taxes within DFID’s overall growth framework and its agenda in Pakistan and what are some of the ways that development partners and governments can come together to take reforms forward.
Key discussions
1. What is the importance of urban property tax for generating revenue and influencing urban policy? What are the ways in which donor initiatives can support or are supporting Government of Khyber Pakhtunkhwa (KP) for urban property tax reform in the province?
2. What is the role of property taxes in the overall growth of Khyber Pakhtunkhwa’s urban centers? How does the recent budget and initiatives reflect the government’s priorities in improving the performance of the property tax? What are the reforms needed in this area specially to improve service delivery in cities?
3. What is the overall structure and design of urban property tax in Pakistan and what interventions in design and governance can be made to address its key weaknesses and improve service delivery outcomes and provincial capacity?
4. What are key learnings from urban property tax reform in Punjab that can inform better strategies to improve property tax collection?
5. To what extent can developing-country experiences and international best practices support the correct implementation of urban property tax in Pakistan?
6. Based on Punjab’s experience with implementing the urban property tax, what should future reforms look like for Punjab and KP?

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