The Federal Board of Revenue (FBR) on Thursday notified Chartered Accountant firms having an ICAP-QCR rating of satisfactory, to recover the due taxes from developers/builders who are obliged to submit completion certificates of real estate projects.
According to an S.R.O. 399(l)2024 issued by the FBR on Thursday, the FBR has notified the firms of chartered accountants having a valid institute of Chartered Accountants of Pakistan (ICAP) quality control review (QCR) rating of ‘satisfactory’ on the 30th September 2023, or later as available on the website of the ICAP (www.icap.org.pk) for the purpose of certification as per provisions of the law.
The FBR has issued a notification at the request of tax lawyer Waheed Shahzad Butt, who raised the issue with the FBR Chairman.
The FBR was urged to immediately notify the Chartered Accountant firms having an ICAP-QCR rating of satisfactory, to smoothly recover the due taxes from developers who are obliged to submit completion certificates of real estate projects.
This is a legal requirement under section 100D of the Income Tax Ordinance, 2001.
Tax lawyer Waheed Shahzad Butt has approached the Chairman FBR, Member Operations-IR, Member Legal, and Member Policy FBR, and states that FBR has not yet notified the list of firms of Chartered Accountants.
Developers are not in a position to submit completion certificates as per the relevant provisions of Section 100D read with the 11th Schedule. Inaction on behalf of the FBR is nothing but the worst kind of maladministration of justice in terms of clause (3) of sub-section (2) of the Federal Tax Ombudsman Ordinance, 2000.
In a letter to the FBR team, Butt said the FBR’s delay to notify the list of firms of Chartered Accountants has had severe consequences for developers across Pakistan, who are now unable to submit completion certificates as required by the legislature through Ordinance, 2001. This situation has resulted in significant uncertainty and financial losses for individuals and businesses.
This negligence was not only causing undue hardship for developers but also posed a threat to the integrity of the tax system and the National Exchequer.
In the case of developers, according to sub clause (ii)(B) of clause (e) of subsection (3) of Section 100D read with sub clause (ii) of clause (e) of Rule 9 of the 11th Schedule, the completion of the project shall be certified collectively in the following manner, namely: the map approving authority or NESPAK shall certify that landscaping has been completed on or before the 30th day of September, 2023 and a firm of chartered accountants having an ICAP QCR rating of satisfactory, notified by the Board for this purpose, shall certify that at least 50 percent of the plots have been booked for sale and at least 40% of the sale proceeds have been received by the 30th day of September, 2023 and at least 50 percent of the roads have been laid up to sub-grade level as certified by the approving authority of NESPAK.
It is imperative that the FBR upholds its responsibilities and takes proactive measures to address this issue promptly and issue notification, Waheed added.
Big service for public through An eminent tax lawyer Waheed Shahzad Butt sb.raising very important omitted points.