ISLAMABAD: A subcommittee of the National Assembly Standing Committee on Finance has recommended an amnesty scheme for the real estate sector, though which the investors would be offered to declare their hidden assets by paying a nominal rate of only 3%.
A joint meeting of finance committees of the both the houses -Senate and National Assembly -will propose a legislation to the next session of Parliament for giving a one-time amnesty scheme to real estate sector.
This was disclosed to a group of media persons by Mian Abdul Mannan – part of a three-member sub-committee of finance, dealing with the matter and ruling party legislator in the National Assembly who has been involved in backdoor discussions between real estate sector and Federal Board of Revenue (FBR) since promulgation of Ordinance to resolve the issue of taxes and enhancement of fee on real estate transactions.
“Parliamentarians have firmed up proposal to grant a one-time tax amnesty for money whitening invested in this sector under which a 3 percent tax will be charged between declared value of DC rates and price tables notified by the FBR. The new legislation bill will be tabled in the upcoming session of Parliament,” he further disclosed.
According to him, not all the money invested in the real estate sector is black money. He claimed that half of the total $18 billion remittances go to real estate sector. This amount, he maintained is legitimate because it is remitted to Pakistan through legal channels.
The committee met here with Saeed Ahmad Khan Manais in chair and discussed to resolve the issue on imposition of tax and enhancement of fee on real estate transactions.
Abdul Manan said that the subcommittee would also recommend to the National Assembly Standing Committee on Finance to form a committee to resolve the differences in property valuation and rates. He said that the committee would also suggest the standing committee to introduce amnesty scheme like stock exchange for the documentation of the real estate sector and to bring the non-filers under tax net.
He said that the real estate sector was contributing US$ 9-10 billion in national economy which was coming through the legal channels.
Speaking on the occasion, Abdul Rashid Godil said that appropriate measures were required to enhance the tax net in the country, adding that there were differences in actual property rates and market rates.
He said that committee would strive to improve the system and gradually update the value of property in 3 to 5 years time. The representatives of the real estate sector informed the committee and claimed that anomalies in the new tax system was hampering their businesses.
They further claimed that Federal Board of Revenue had enhanced the taxes on property by 100 percent and provincial governments in terms of DC rates by 1,000 percent. He urged the government to withdraw all taxes increased in July 2016 and announce a matching scheme like stock exchange for revival of the sector.
They informed that country was facing shortfall of about 8.7 million houses and demand of houses was increasing each year. They urged the federal and provincial governments to devise a mechanism to address the differences of property rates.
