According to Express News, a meeting of the National Assembly's Sub-Committee on Finance was held in Islamabad under the chairmanship of Bilal Azhar Kayani. The meeting discussed the restriction on non-compliant tax filers from purchasing property.
Bilal Azhar Kayani questioned why the eligibility clause for wealth statements was included in the purchase of property and suggested that the definition of filer eligibility in the Tax Laws Amendment Bill should be improved.
Chairman ABAD North, S.M. Nabeel, proposed that FBR should immediately register individuals involved in property transactions and said people should not be discouraged from investing in the real estate sector as this law could severely impact the property market.
Chairman of RET, Arif Habib, suggested that investments up to Rs. 50 million in the property sector should not be scrutinized for one year. This, he argued, would encourage significant registration and boost investment in the property sector.
He criticized the draft of the Tax Laws Amendment Bill, calling it dangerous, and expressed concerns about potential harassment by officials overseeing the registration process. He emphasized that the real estate sector is a major contributor to economic development and pays 115% in taxes, warning that the new law would halt investments in the sector.
Arif Habib added that investment is already flowing out of Pakistan to Dubai, and the government has failed to address this issue. He recommended collecting tax filer information at the time of property registration and noted that many corporate developers are eager to enter the market.
Chairman of ABAD, Hassan Bakhshi, remarked that FBR's data is outdated. He said property values have increased under the new valuation issued by FBR and argued that the law would affect 60% of individuals, not just 2.5%. He added that the property sector operates through banking transactions and does not involve black money.
Chairman FBR, Nauman Rasheed Langrial, informed the committee that 1.695 million transactions were recorded last year, with 93% of them valued under Rs. 5 million and 3.8% under Rs. 10 million. He reiterated that only 2.5% of individuals would be affected by the Tax Laws Amendment Bill.
He further explained that online declarations could be submitted under the new law. FBR is developing an app for this purpose, allowing declarations to be filed up to one hour before a property transaction.
Langrial emphasized efforts to reduce transaction taxes and stated that untaxed income should not be allowed for property sector investments. He noted that undeclared capital is being invested in the property sector, often through banking channels. He revealed that only 12 individuals in Pakistan have declared assets exceeding Rs. 10 billion.
He also highlighted the widespread issue of undervaluation in Pakistan. The National Assembly's Sub-Committee on Finance requested further clarification from FBR regarding the law prohibiting non-compliant tax filers from purchasing property.
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