ISLAMABAD: The Federal Tax Ombudsman (FTO) has issued directive to the Federal Board of Revenue (FBR) to operationalize the ‘Directorate General of Immovable Property,’ established under section 230F through the Finance Act of 2018.
The FTO’s own motion recommendations are aimed at addressing the non-functionality of this critical department since its inception and enhancing the proper valuation of immovable property.
The FTO, in its recommendations, stressed the importance of establishing an appropriate framework for the valuation of immovable property, given the current lack of organized procedures and oversight in this area. The FBR has been tasked with several key responsibilities to achieve this objective.
Firstly, the FBR has been instructed to direct the Member (Policy Wing) to develop Standard Operating Procedures (SOPs) that include suitable methods for the valuation of immovable property. This move is expected to provide clear guidelines and standardize the process for valuing properties across the country.
Additionally, the FBR is urged to direct the Member (Policy) to establish standing anomaly committees at various levels. These committees will play a vital role in addressing grievances and concerns of stakeholders regarding valuation discrepancies and inconsistencies. This proactive step is likely to instill greater confidence in the property valuation process and enhance the trust of taxpayers.
The FTO has also emphasized the need for hiring competent and experienced valuers for property valuation. By bringing in experts with the necessary knowledge and experience, the FBR can ensure that valuations are carried out with accuracy and transparency, reducing the risk of errors and disputes.
Furthermore, the FBR has been tasked with formulating a schedule for the periodic revision of valuation tables. This is a crucial element in ensuring that property valuations remain up-to-date and reflective of market conditions, which can change over time. Regular updates to the valuation tables will help in maintaining fairness and accuracy in the property tax system.
The FTO’s findings pointed out several areas of concern, highlighting the existing shortcomings in the property valuation process. It was observed that no significant efforts had been made by the FBR to establish a comprehensive framework for property valuation, nor had any methods been developed for the guidance of valuation committees operating within their respective jurisdictions.
Moreover, the absence of standing anomaly committees at any level was noted, which left stakeholders without a formal mechanism to address grievances or rectify valuation inconsistencies. This lack of oversight had created frustration among taxpayers and potential room for misinterpretation of property values.
The FTO’s directive to the FBR comes as a welcome move for property owners, buyers, and real estate professionals in Pakistan. Establishing a functional Directorate of Immovable Property Valuation and implementing the recommended SOPs and procedures are expected to enhance transparency, fairness, and overall efficiency in property valuation, ultimately benefiting all stakeholders involved.
As the FBR begins the process of operationalizing the Directorate, it is hoped that these measures will pave the way for a more reliable and just property valuation system in the country, bringing much-needed clarity and consistency to an important aspect of the taxation process.
