Pakistan, Aug. 7 -- Previously, property tax was calculated based on the Annual Rental Value (ARV), where excise inspectors estimated rental income to determine taxes. This method often led to underreporting, human error, and biased assessments. However, the new Capital Value (CV) system will use fixed criteria like land size and notified rates, reducing manipulation and subjectivity in the process.

Backed by research from the Lahore School of Economics, the reform shows that using capital value instead of rental value can increase tax collection even with lower rates. Several international organizations, including the World Bank and GIZ, supported the transition. Their involvement adds strength to the reform's economic model and credibi...