KARACHI: The Federal Board of Revenue (FBR) has started seeking personal and financial data of property owners from realty dealers to net untaxed money in an estimated Rs7 trillion real estate market.
According to the official sources, the FBR started screening the investments made in properties with an objective to identify new taxpayers and compel the existing taxpayers to file their annual tax returns and declare assets.
An official at Regional Tax Office-II (RTO) Karachi said the tax authorities have so far issued notices to property registration authorities and housing societies to obtain details of investors. FBR granted property registration authority, housing societies and construction industry with power to collect withholding tax from buyers and sellers of properties.
“Now, we have invoked section 176 of Income Tax Ordinance 2001 to obtain information of investors of the past five years from the withholding agents,” a RTO-II official said. “The real estate sector is one of the biggest undocumented sectors.”
Various estimates put the investment in real estate sector at more than seven trillion rupees. Officials of Association of Builders and Developers Association (Abad), which is the leading body representing builders in Pakistan, confirmed that the association’s members have received a number of notices seeking investors’ information.
“All the required information is already available with the FBR when property is transferred,” a letter sent by Abad to Adviser to Prime Minister on Finance Miftah Ismail said, requesting him to stop the exercise.
ABAD officials said FBR officers are asking the association’s members to personally appear and submit the required information, “which is resulting in harassment”. Arif Yousuf Jeewa, chairman of Abad said the FBR’s drive would sabotage the proposed tax amnesty scheme as well as affect foreign investments.
