Sub-national government taxation: case of property taxes in Punjab, Pakistan

Piracha, Muhammad Mujtaba (2016) Sub-national government taxation: case of property taxes in Punjab, Pakistan. Doctoral thesis (PhD), University of Sussex.

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Property taxes tend to be under-used globally, especially in developing countries. This is
particularly true in Pakistan. To explore the reasons, I studied policymaking and administration
in relation to the recurrent (annual) property tax in Punjab, Pakistan’s most populous and
urbanised province. I used a mix of research methods, including extensive field observations of
how the lower level tax staff of the Excise and Taxation Department go about their work.
I found three major probable explanations for the very low levels of property tax collections:
• Especially after a major decentralisation reform in 2001, responsibilities for collecting
the property tax and the revenues it produces are both divided in complex ways between three
levels of subnational government. Each level has low incentives to perform its tax collection
• Each level of subnational government obtains most of its income either from transfers
from higher levels of government or from loans. It generally seems easier for them to increase
their incomes by putting more effort into tapping these sources, rather than trying to improve
their own tax collection performance. The lack of strong political pressures to increase spending
has a reinforcing effect.
• It has become administratively difficult for senior policymakers to increase property tax
revenue collections through mobilising the organisational resources of the Excise and Taxation
Department. Property tax collection has become locked into a system that combines (a) a high
degree of informality in routine practices, (b) exclusive control of detailed information about tax
collection potential and performance by lower level staff and (c) modest rent-taking and
responsiveness to local pressures for leniency in tax collection at these lower levels. When
higher-level officials in the Department attempt periodically to enforce the achievement of
higher tax collection targets, they are mostly frustrated by these informal working practices and

Item Type: Thesis (Doctoral)
Schools and Departments: Institute of Development Studies
Subjects: H Social Sciences > HJ Public Finance > HJ2240 Revenue. Taxation. Internal revenue > HJ4113 Property tax
Depositing User: Library Cataloguing
Date Deposited: 28 Oct 2016 13:36
Last Modified: 28 Nov 2018 09:26

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