KARACHI: Property transactions have become major source of money whitening as bulk of concealed income documented under tax amnesty granted by the government about five months ago.
The government granted a permanent amnesty through Section 111 (4c) of Income Tax Ordinance, 2001 by paying 3 percent of tax under Section 236 W of the Ordinance on the purchase of an immovable property. The amnesty is available on the difference of property valuation notified by the Federal Board of Revenue (FBR) and District Collector values of a provincial government.
The amnesty scheme incorporated in the Ordinance on December 02, 2016. Since the launch of the amnesty an amount around Rs55 billion has been whitened in about 40,000 transactions.
The pace of illicit money declaration is getting momentum as every month the declaration of amount is rising. During April 2017 around Rs20 billion was declared by purchaser of immovable properties. The declared amount was only Rs2 billion in the first month of December 2016. Considering the pace of significant declaration it is estimated that another Rs50 billion may be whitened in the last two months of the current fiscal year.
Sources in FBR said that due to election year and plugging the loopholes in money laundering the documentation of illicit money was higher.
