According to newspaper reports, the government is going to launch a tax amnesty scheme for the real estate sector which has been enduring severe recession since the government updated different advance tax rates for filers and non-filers in the federal budget for 20-2017on the sale or transfer of immovable property. The rate of tax is 1 percent of the gross amount of the consideration received for filers and 2 percent of the gross amount of the consideration received for non-filers. Besides, the purchaser has to declare the source of income which had sunk the real estate sector into the quicksand of troubles. Thousands of real estate dealers have been sidelined and others have started looking opportunities in Dubai, Sri Lanka and other destinations for investments. However, the government is now planning to offer tax amnesty scheme in the property sector. The investors are not offered to declare their hidden assets by paying a nominal rate of three present. The government is holding discussions with the stakeholders to implement the plan, but experts fear the scheme could meet the fate of an earlier tax amnesty scheme.
Corruption and tax evasion is a world phenomenon as tougher are the tax laws, more is corruption and tax evasion. The tough laws are not a guarantee to avoidance of tax, as tough laws give tremendous powers to government functionaries and the black sheep fully enjoy and exploit the laws for their vested interests. Those who invest or work in Malaysia fully know that the government could not stop corruption despite offering attractive benefits not only to the government officials but also to the people to expose corruption. The government policymakers must concentrate on results and not on the procedures. It looks morally correct to discourage corruption but everything has limits. The government must take measures to stop capital flight and ensure the revival of business and trade opportunities in Pakistan to absorb the black money. The black money can be contained but cannot be stopped, therefore, practical steps are required to utilize it within the country whether it is the real estate sector, gold purchase or the national saving schemes.
It is unfortunate that the government creates mess to clear it at the later stage. It is looking to introduce the tax amnesty scheme after it amended the Income Tax Ordinance with effect from July 1 to collect taxes on property transactions at the market values. The government backtracked within a month after it compromised the property valuation rates and promulgated a Presidential Ordinance on July 31 in consultation with property dealers. The government must stop the game of hide and seek with taxpayers and avoid to take steps on which it has to retreat at a later point of time.
