SEED Program: Frameworks for reforming Khyber Pakhtunkhwa’s Property Tax and Sales Tax regime

The provincial government in Khyber Pakhtunkhwa (KP) requested IGC’s support in collaboration with CDPR’s to help formulate its reform agenda around two important sub-national tax instruments, the urban property tax and sales tax on services. Such taxes are important sources of revenue for the Pakistan’s provinces. With the increased pressure on provinces to deliver during the covid-19 crisis, it has been pivotal to maximize the potential of such taxes to create much-needed fiscal space for improved service delivery.

This study was funded by FCDO’s SEED program (2020)

Key Output(s)

Report:  Reforming Sales Tax in KP

The existing sales tax legislation in Pakistan’s province of Khyber Pakhtunkhwa (KP) has significant weaknesses. The team has worked with the KP government on a report addressing various components of the Sales Tax on Services Act in KP.

Report: Reforming Property Tax in KP

The report on property tax in KP acts as a policy guide for the KP government to carve out a framework for future reform to improve the performance of urban property taxes in KP.