Strengthening Immovable Property Taxation in Pakistan

This report is a technical document that outlines the challenges and opportunities within Pakistan's immovable property taxation system. It identifies significant untapped revenue potential constrained by structural, institutional, and valuation weaknesses. The report details how property-related taxes can be a stable and visible source of revenue for subnational finance but notes that Pakistan currently collects a small share of GDP from these taxes compared to international benchmarks. It highlights the fragmentation of the taxation system across various government levels and the outdated valuation practices that hinder effective taxation. The report maps property-related revenue sources and emphasizes the reliance on transactional taxes while underutilizing recurrent taxes on property ownership. Recommendations include a phased shift towards capital-value-based taxation, harmonizing valuation methodologies, and establishing an independent valuation agency. The strategic roadmap provided aims to enhance fiscal autonomy and improve equity and compliance in the property taxation framework in Pakistan.