KARACHI: The federal government through their high officials of Federal Board of Revenue (FBR) has directed to Regional Tax Officers (RTOs) in all mega cities of the country to collect two to three years fair market price mechanism of land-transfer on actual ‘Sale Deed’ and Purchase Agreements. These reports have to be submitted to their regional Heads till July 25.
The FBR has asked the regional officers to collect the market rates of the land and the actual rates on which the builders and developers obtained the lease of the land, it is learnt here on Saturday.
The government has taken this decision to counter the fair market price mechanism data of Association of Builders and Developers (ABAD) and other 13-member committee to be submitted in a meeting on July 27. Advisor to the Prime Minister Haroon Akhtar and Finance Minister Ishaq Dar will chair the meeting.
President Federation of Pakistan Chambers of Commerce and Industries (FPCCI) Rauf Alam, Pakistan Association of Builders and Developers (ABAD), President Developers Association Islamabad Choudhry Naseer Ahmed, and others 13 members committee will have their third meeting with Ishaq Dar and Haroon Akhtar on the issue of fair market price mechanism on July 27.
According to the market sources, the actual market price of the land in Karachi, Lahore, Islamabad and other big cities of Pakistan is more than 10 times high of the ‘Sale Deed’ on which a person gets the land and gives tax to the government.
The government wants to get tax on the fair market price on which the builders and developers purchase the lands, but they are not ready to pay tax on same rates.
In a bid to resolve a serious crisis in the real estate sector, the FBR and realty stakeholders on Thursday agreed to work out valuation tables of property in 18 cities for the purpose of taxation.
The cities selected for the valuation tables include 10 in Punjab Lahore, Rawalpindi, Jhelum, Gujranwala, Gujrat, Sialkot, Faisalabad, Multan, Rahim Yar Khan and Bahawalpur and three in Sindh Karachi, Hyderabad and Sukkur. The tables to be prepared by the 13-member committee as well as the FBR will be matched in the next meeting. `We will resolve the discrepancy, if any, in the valuation tables of property, the source said.
Two cities each in Khyber Pakhtunkhwa Peshawar and Abbotabad and Balochistan Quetta and Gwadar have also been selected. Islamabad Capital Territory will be dealt as a separate city.
A tax official said the introduction of fair market value was not only aimed at generating revenue but also at documenting the economy. “This move would also discourage landing of black money in the real estate,” he said.
Internationally, tax is charged on transaction value, but in Pakistan the collector value is much lower than the actual transaction value. In provinces, the valuation table is notified by the collector of a district under Section 27-A of the Stamp Act, 1899.