ISLAMABAD: The Federal Board of Revenue (FBR) notified fresh and revised valuation of immovable properties for various cities of the country to bring the declared prices at par with the fair market value.
The FBR issued valuation and revaluation of immovable properties for 16 cities of the country. These cities included Abbottabad; Attock, Bhawalnagar; Bhawalpur; Chakwal; Toba Tek Singh; D I Khan; Sukkur; Sialkot; Sheikhupura; Sahiwal; Faisalabad; Rawalpindi; Rahim Yar Khan; Quetta; Peshawar; and Norowal.
The FBR started issuing valuation tables in August 2016. Later, it amended the valuation in 2019. The revenue body previously issued valuation tables of a dozen cities.
The aim behind issuing the valuation tables is to promote documentation of the economy. The apex tax body collects withholding tax on the sale and purchase of immovable properties at the notified rates in the valuation tables.
The State Bank of Pakistan (SBP) in its annual report 2020/21 on the “State of Pakistan’s Economy” released last week, said there was a need to expand revenue by aligning the property values with the market prices.
In this regard, the FBR has revised the valuation of immovable property rates in July 2019 for various cities. “There is a need to ensure continuity in this exercise to remove the disparity between the property values and market rates,” the SBP said.
Keeping in view the issues of widening fiscal imbalance and declining tax-to-GDP ratio in Pakistan, the government has initiated tax policy reforms during the last few years. These efforts were further streamlined under the IMF’s Extended Fund Facility (EFF) programme in 2019/20.
Overall, the ongoing tax policy reforms in the country, like the elimination of preferential general sales tax rates, phasing out of income tax exemptions, using third party data sources, etc, are in line with the best practices identified in the literature.
However, there is a need to widen the scope of these efforts to ensure a sustained increase in the tax base, the SBP added.