The government is likely to further raise taxes for the non-filers on the buying and selling of immovable properties in the upcoming budget (2023-24) to also document the trading of files of plots at private housing societies.
Sources informed ProPakistani that the withholding taxes are avoided at the private housing schemes during the trading of files of plots across the country. The target would be registered property agents who are involved in business transactions between the buyers and sellers of immovable properties.
Many private housing societies are involved in the avoidance of taxes by not showing actual transfers and the trading of files continues without payment of taxes. To check such activities at the private housing schemes, the FBR will take measures in the coming budget to document buyers and sellers and ensure payment of taxes.
The legal changes would ensure the payment of taxes on buying and selling of files of plots by the private housing societies and it would also ensure documentation of the immovable properties.
Presently, the government increased the tax rate from 100 percent to 250 percent in case of the purchase of property by persons who are not active taxpayers. In the case of the purchaser of immovable property who is not appearing on the Active Taxpayers List, the rate of tax to be collected under section 236K has been increased by 250 percent of the rate specified in Division XVIII of Part IV of the First Schedule. Necessary change has been incorporated in rule 1 of the Tenth Schedule to the Income Tax Ordinance.
The FBR will issue increased values of immovable properties from July 1, 2023. The FBR has started the process of the updation of valuation tables of properties across Pakistan in consultation with the provincial authorities.
The FBR has asked the senior members Board of Revenues, Sindh, Balochistan, Punjab. Khyber-Pakhtunkhwa, and Gilgit-Baltistan to issue instructions to the divisional heads/district heads for the nomination of representatives of the Board of Revenue for consultation/consideration with the teams constituted by the chief commissioners of Regional Tax Offices.
The FBR is presently pursuing the agenda of taxation reforms namely the Pakistan Raises Revenue Project (PRRP) under the auspices of the World Bank. One of the most significant components of the project aims at harmonization of the valuation of immovable properties between FBR and the provincial governments/districts.
