With the prospect of local government elections in the Islamabad Capital Territory (ICT) on February 15, 2026, it is timely to explore the role of Union Councils (UCs), the grassroots tier of the government in the federal capital. Under the Islamabad Capital Territory Local Government Act 2015 (ICTLGA), UCs are assigned a wide range of civic, administrative, and community-related functions. To perform these duties, UCs manage a local fund, managed through multiple streams, including levying certain local taxes and fees.

Learn more about how the UCs are mapped for LG Elections 2026

What is the role of a Union Council under the law?

ICTLGA 2015 has defined the functions of UCs in the Second Schedule of the Act. These functions include a broad set of municipal, community, and administrative functions. These cover maintaining public streets and open spaces, arranging street lighting, providing conservancy services, i.e., cleaning of public spaces and waste collection, managing local water supply schemes, and executing small-scale development works.

Union Councils are also tasked with maintaining public records, including the registration of births, deaths, marriages, and divorces, and disseminating information of public interest. They are tasked with promoting local sports, libraries, and recreational activities, and supporting relief efforts during natural disasters such as floods, earthquakes, or epidemics.

While the urban UCs are often serviced through a centrally managed water supply and sewerage system, the rural areas are not. That is why the ICTLGA places additional responsibility on rural UCs to maintain rural water supply schemes and public sources of drinking water, and coordinate with the community organizations for proper maintenance of such water supply schemes and sewerage.

In addition, Union Councils are mandated to identify gaps in service delivery and make recommendations to the Metropolitan Corporation of Islamabad (MCI).

Read how the LG system in the federal capital has evolved since 1969.

How are Union Councils financed?

Section 78 of the ICTLGA provides for a Local Fund for each local government, including a Union Council. This fund serves as the primary financial pool from which the Union Council meets its expenditures.

The Local Fund comprises revenues from multiple sources. These include proceeds of taxes, fees, rates, and charges levied by the Union Council, as well as grants and transfers from the federal government. Income from properties owned or managed by the Union Council, profits from investments, proceeds from markets or fairs, and fines or penalties imposed under the law are also credited to the Local Fund.

Additionally, the law allows for contributions from individuals and institutions, intergovernmental transfers from other local governments, and any funds placed at the disposal of the Union Council under government directions.

The Federal Government is legally required to transfer grants, including the Union Council’s share of taxes collected on its behalf, to the Local Fund on a monthly basis. In practice, however, delays and uncertainty in transfers have constrained the financial autonomy of Union Councils in Islamabad.

What taxes and fees can a Union Council levy?

In addition to grants and transfers, the ICTLGA section 88 allows the local governments, including UCs, to levy taxes or fees, which are pre-vetted by the Federal Government. These include an entertainment tax on dramatic and theatrical shows, fees for registration and certification of births and marriages, and charges for services provided by the Union Council.

Union Councils may also levy rates for the execution or maintenance of public utility services such as street lighting, drainage, conservancy, and water supply. In addition, the law allows for a community tax for the construction of public works of general utility, and licensing fees for professions and vocations, as prescribed.

Read more about the process of local government elections under ICTLGA