While concluding its investigation, the Federal Tax Ombudsman (FTO) has recommended the Federal Board of Revenue (FBR) to remain vigilant with regard to prevailing market prices in the Real Estate sector.
The FTO has undertaken four Own Motion investigations in relation to the valuation of Real Estate in Bahawalpur, Bahawalnagar, Lodhranand Rahim Yar Khan Region. The FTO investigations were in relation to certain deficiencies in the valuation of properties falling under the agricultural land category, private housing societies, commercial plots/buildings, and farmhouses.
FTO has observed that the current valuation process of immovable property is being carried out by the tax functionaries under the agenda of taxation reforms namely Pakistan Raises Revenue Projects (PRRO) on the instructions of the World Bank to develop a uniform valuation table of immovable properties. It is an ongoing process and is to be visited periodically by the respective RTOs.
FBR notified SRO1269(I)/2022 dated 1st August 2022 on the basis of recommendations made by the respective RTO. The said rates were proposed by RTO Bahawalpur in consultation with relevant District Revenue Authorities to rationalize the valuation table with the prevailing market rates.
It has been argued that the District Revenue Authorities in certain instances expressed their constraint not to revise the valuation of certain properties beyond a certain percentage because the Punjab Revenue Board does not allow the increase beyond a certain percentage.
Accordingly, FTO has recommended to FBR that RTO, Bahawalpur should remain vigilant with regard to prevailing market rates in the real estate sector and periodically revisit all the proposed rates of immovable properties through continuous exercise of making them compatible with the existing market rates.
Furthermore, the FBR Policy Wing (IR) should timely notify the additions & amendments, proposed by RTO Bahawalpur in this regard.