Islamabad: In an effort to integrate the real estate sector into the tax framework, the Federal Board of Revenue (FBR) has committed to imposing extra taxes on non-filers involved in the sale and purchase of plots. Consequently, the government plans to enhance taxes for non-filers in the transaction of plots and the registration of housing societies.
To streamline the documentation of the real estate industry, it has been suggested to utilize banking channels rather than cash transactions. According to sources, all records, such as transfers and purchases, related to plots in housing societies will be registered.
A collaborative report on the taxation of the real estate sector between the Centre and provinces will be presented to a global lender. Additionally, information on property agents and the sale and purchase of plots will be documented in the Federal Board of Revenue (FBR), as per the sources.
According to various reports, the upcoming budget is expected to introduce new measures to eliminate unrecorded transactions within the real estate market. Additionally, plans to impose taxes on property file transactions will be developed.
Presently, a 7% withholding tax for non-filers and a 4% capital gains tax are applied to plot sales and purchases. However, tax evasion has been occurring in the sale and purchase of files due to the absence of a proper enforcement system.
Previously, the Federal Board of Revenue (FBR) presented their tax revenue strategy to the International Monetary Fund (IMF) delegation during the second round of discussions under the $3 billion Stand-by Agreement (SBA).
At present, an IMF delegation is in Pakistan for their second evaluation under the SBA loan program. In a recent update, the FBR shared details of their tax reform strategies and measures to incorporate 3.1 million retailers and defaulters into the tax system, aiming to boost the nation’s income.
The delegation received information on structural changes within the FBR and expressed optimism in reaching a tax collection of 9,415 billion rupees. As per FBR, the IMF’s target for July to December 2023 was successfully achieved, as they collected 4,468 billion rupees against the set goal of 4,425 billion rupees.
