KARACHI: Minister of State for Finance and Revenue Rana Muhammad Afzal has ruled out any change in taxation mechanism for immovable property transactions on the basis of valuation prescribed by Federal Board of Revenue (FBR).
At a meeting with members of Association of Builders and Developers (ABAD), he rejected a proposal of the association to bring the valuation of immovable properties at par with open market rates but in order to facilitate the investor the government should reduce the tax rate.
The state minister said that due to existence of undocumented economy there are issues of declaring black money. “There will be no benefit to revenue by reducing the tax rates as people unlikely to declare at open market rates,” he added.
The minister said that the real estate business attract most of the money existed in the economy. Further, the inflows of home remittances are mostly invested into this business activity.
He said that overseas Pakistanis send $18 billion as remittances out of this an amount of $8-10 billion invested in real estate business.
The state minister expressed reservations over the money invested in this segment of the economy and the declaration of the investment. The prime reason for reservation is the lowest return in the shape of tax money against investment made in real estate business.
