ISLAMABAD: The government is planning introducing a new law in budget (2014-15) to empower the Federal Board of Revenue (FBR) to purchase property at a higher rate of 25 percent than the declared sale price or value of land to check the incidence of massive undervaluation and misdeclaration in the country. The idea regarding the introduction of a new law to curb massive undervaluation of properties was discussed during the meeting of Tax Advisory Council held at FBR House.
It was pointed out that a law in India empowers the state to purchase property at 10 percent higher rate than the declared but undervalued price of a property. A similar law can also be introduced in Pakistan. The proposal is to empower the state to purchase under-valued property at 25 percent higher rate than the declared price. It is also proposed that the government should be bound to purchase or carry out such transaction within 90 days. In order to eliminate practice of undervaluing properties, the FBR should have a lawful right to buy properties at 25 percent over and above the registered price.
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It was also discussed that property is a federal subject in India whereas it is a provincial subject in Pakistan. All legal aspects need to be examined before finalisation of the proposal in the light of Indian model. Tax authorities expressed their willingness to propose some measures to check undervaluation of properties in the upcoming budget (2014-15).
Meanwhile, Finance Minister Senator Ishaq Dar presided over a meeting of Tax Advisory Council comprising all stakeholders including chartered accountants, academia, senior tax consultants, retired senior officers, industrialists, Presidents of FPCCI, four provincial CCIs and professional associations including ICAP, ICMA, President Tax Bar, SECP, Pakistan Banking Association, KSE, LSE and ISE with the FBR officials for consultation on budget related proposals to be incorporated in the financial year 2014-15.
The Finance Minister said that economic recovery was top priority and with the introduction of reforms during the last 10 months, the economy had been put on the right direction. Now with the hard work, commitment and dedication, all the economic indicators are on the upward trajectory, he added.
