The Federal Board of Revenue (FBR) has compiled a list of over 70 real estate agents allegedly involved in transferring dollars to the UAE through Hawala/Hundi, contributing to recent pressure on the exchange rate, The News reported citing sources.
The transfers, amounting to millions of dollars, were converted from cash into foreign currency in the open market before being remitted to Dubai’s real estate sector.
According to the report, senior officials confirmed that the FBR has flagged these transactions and raised concerns over the scale of the operation, calling it the tip of a larger financial scandal. The agency has recommended further investigations by the Federal Investigation Agency (FIA) and other relevant authorities to track the extent of illicit fund transfers.
The report indicates that property dealers collected large sums from clients, converted them into foreign currency, and sent them to the UAE for real estate investments. Real estate tycoons, meanwhile, have warned the government that investment could shift abroad if tax rates increase and the “no questions asked” investment limit is raised from Rs10 million to Rs25-50 million under the proposed Tax Laws Amendment Bill 2024, which remains under review in the National Assembly Standing Committee on Finance.
In response to concerns over undisclosed assets, the government has given the FBR two months to develop an app allowing taxpayers to voluntarily amend their filed returns and adjust declared asset values.
Real estate sector representatives defended the practice, arguing that investment in Dubai’s property market has been ongoing for years, facilitated by exchange companies due to lax questioning on income sources. They estimate that around two million dirhams are regularly transferred for property purchases in Dubai.
To curb illegal fund transfers, real estate investors have urged the government to reduce property taxes and introduce investment incentives that would discourage foreign property purchases through informal channels.
