The Pakistan Tehreek i Insaff (PTI) government has discreetly offered what is little more than tax amnesty to the realty sector in the budget.
The government in the budget has allowed the legalisation of tax-evaded money at just 4% of the property value. This tax amnesty scheme is buried deep in the budget, hiding out in the 10th schedule of the proposed Finance Bill 2019 which allows real estate investors to pay only 4% of the transaction value in taxes, while keeping the source of investment a secret and remain outside of the tax net.
The shady provision is is now the second tax amnesty give by Prime Minister Imran Khan, and will allow investors in the realty sector to save a massive Rs 660 million on property worth more than Rs 1 billion.
Before the introduction of the 10th schedule, concealed income was supposed to be charged at 100% of the maximum rate of due taxes, which would mean the buyer would have had to pay Rs 700 million on property worth Rs 1 billion. Now, after this hidden amnesty scheme, they only have to pay Rs 40 million.
Another advantage the realty sector will get is that investors will be immune from any investigation into the amount they invest in property due to the final tax assessment of only 4%.
