KARACHI: The Federal Board of Revenue (FBR) on Friday initiated the drive of obtaining financial and personal data of property owners from real estate dealers to account for untaxed money, said officials.
The tax watchdog has started this process of screening investments made in properties aiming to uncover new taxpayers and forcing current ones to file their annual income tax returns, reported The News.
According to an official working at the Regional Tax Office-II (RTO) Karachi said the tax watchdog had forwarded notices to property registration authorities and housing societies to fetch details of investors.
The property registration authority, housing societies and construction industry has been given authority to collect withholding tax from sellers and buyers of properties as per FBR directives.
An RTO-II official shared the tax watchdog invoked section 176 of Income Tax Ordinance 2001 to fetch data about investors from last five years from the withholding agents.
Several officials at Association of Builders and Developers Association (ABAD) has corroborated the association’s members have got notices from FBR requesting investors information.
In a letter addressed to Adviser to Prime Minister on Finance Miftah Ismail by ABAD stated that all information was already available with the FBR when property was transferred and called for an end to this practice.
Also, ABAD officials are being asked to appear in person and present this requirement by the FBR, which is tantamount to “harassment” they said.
ABAD, Chairman Arif Yousuf Jeewa stated the FBR’s current drive would hamper the suggested tax amnesty scheme and impact foreign investments.
ABAD officials said FBR officers are asking the association’s members to personally appear and submit the required information, “which is resulting in harassment”. Arif Yousuf Jeewa, chairman of Abad said the FBR’s drive would sabotage the proposed tax amnesty scheme as well as affect foreign investments.
He warned if the FBR’s attitude didn’t change, this would restrict the developers and builders to selling and purchase of properties, resulting in the destruction of the construction sector.
Mr. Jeewa shared every builder and developers shares details of allottees with the FBR at time of property registration and the tax watchdog collection advanced income tax and capital gains tax at the time the property gets registered and leased.
ABAD chairman said they are making efforts to rope in foreign investments into Pakistan and various foreign investors had shown a willingness to invest into the real estate sector. He said the current move of FBR has damaged foreign investors sentiment again.