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CERP collaborated with the Excise, Taxation, and Narcotics Control Department (E&T) Punjab to improve performance of tax collectors by designing and evaluating interventions of performance pay incentives schemes and merit-based transfers and postings.
Building on the Punjab Property Tax Project, the Social Compact project at CERP is partnering with the Government of Punjab to examine a series of reforms that strengthen the link between the provision of local services and local property tax collection in urban Pakistan.
Principal Investigators:
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Increasing tax collection is an area of focus globally. In Pakistan, tax collection, and property tax in particular is a substantial issue even relative to other developing countries. Property tax collection in Punjab is roughly a fifth of the level of developing countries (World Bank, 2006). For 5 years Excise and Taxation Department (E&T) Punjab worked with CERP and its team of international researchers from Harvard University, London School of Economics and MIT to improve performance tax collection. The collaboration focused on two distinct projects: Performance Pay Project and Merit-Based Transfers and Posting Project, that were designed to improve tax collector performance by introducing performance based human resource reforms.
2010 – 2016
Excise, Taxation and Narcotics Control Department (E&T) Punjab and Punjab Finance Department
Principal Investigators:
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The social compact between citizen and state – whereby a citizen pays taxes and receives (public) goods and services – is a critical link in the development process. This link is especially salient in the context of local governments and a significant metric on which they are judged. However, if citizens perceive little benefit from their tax payments, or local services are disconnected from local decision-making, this link can be broken. This can create a vicious cycle where citizens do not receive high quality services because resources are limited by low levels of local tax revenue, and the low quality of services leads to a low willingness to pay taxes, as well as a broader lack of trust in the state. This study seeks to examine how to break this cycle through a series of reforms that strengthen the link between the provision of local services and local property tax collection in urban Pakistan. We aim to increase the link between taxes paid and local services received by enhancing the linkages between a) local preferences and the types of local urban services provided, and b) the amount of local tax revenue and amount of local services provided. The goal is to reduce evasion of local property taxes, increase the quality of local services, make local urban services more responsive to local needs and ultimately to help repair the social compact between citizenry and the state. Building on the Punjab Property Tax Project, the Social Compact project at CERP is partnering with the Government of Punjab to examine a series of reforms that strengthen the link between the provision of local services and local property tax collection in urban Pakistan.
2016 – ongoing
Excise, Taxation and Narcotics Control Department (E&T) Punjab, Red Buffer Pakistan, Sub-National Governance Programme’s Innovation Challenge Fund on Public Financial Management and Fiscal Space
Local Services, Service Delivery, Preferences