Rs2b collected in taxes on property transactions by the FBR
The Federal Board of Revenue has been successful in collecting Rs 2b in taxes on property transactions under an amnesty scheme introduced for real estate sector last December. This amnesty scheme was an opportunity for individuals to convert their black money into white.
Rs 13b worth of property transactions were conducted in real estate sector during May. According to sources, the investigation of directorate general of Intelligence and Investigation, Inland Revenue revealed that most of the money laundering is actually occurring in the real estate sector. Since the introduction of this amnesty scheme, 71,000 property transactions have been conducted involving an amount of Rs69b.
The Income Tax (Fourth Amendment) Act, 2016 was enacted last year on the 2nd of December, which provides people reprieve from their source of funds being questioned through the aforementioned act. FBR sources also mentioned that since the avenues of parking illegal gotten wealth were being shut, hence individuals are now taking advantage of this scheme. The tax collection from immovable property saw a massive spike in the last financial year 2016-17 of 114pc to reach Rs15b. It more than doubled from the Rs7b collected in FY 2015-16.
The FBR also proposed a minimum tax on the selling of a property only if the transaction occurs is conducted within the tax year. This proposal is part of the Finance Bill 2017, which is being debated in the Senate currently. It also expects to generate a higher withholding tax collection from the upcoming FY 2017-18 which is a part of the proposals in the Finance Bill 2017.