Karachi, August 31, 2024 – The Federal Board of Revenue (FBR) has collected an impressive Rs 183 billion from taxes on immovable property transactions during the tax year 2023-24 (TY24).
This marks a significant increase of 17% compared to the Rs 157 billion collected in the previous tax year, according to official sources.
The substantial growth in tax collection is primarily attributed to higher rates and revised valuation tables implemented by the FBR, alongside stringent measures to bring more taxpayers into the fold.
A detailed breakdown of the tax collection shows a notable rise in withholding taxes collected on both the sale and purchase of immovable properties. During TY24, the FBR collected Rs 87 billion as withholding tax on the sale and transfer of properties. This represents a 21% increase from the Rs 72 billion collected in the previous tax year.
Furthermore, withholding taxes from property buyers saw a significant rise as well. The FBR collected Rs 96 billion in TY24 compared to Rs 85 billion in the preceding tax year, reflecting an increase of 13%. These withholding taxes are collected under the provisions of Sections 236 and 236K of the Income Tax Ordinance, 2001.
Section 236 of the ordinance pertains to the collection of withholding tax on the sale and transfer of immovable properties. In contrast, Section 236K deals with the withholding tax on the purchase of immovable properties. The increased tax rates and the revision of valuation tables have been instrumental in boosting revenue under these sections.
The FBR’s strategy to revise valuation tables and introduce higher tax rates for individuals not listed on the Active Taxpayers List (ATL) has also significantly contributed to the surge in collections. By targeting those outside the ATL with elevated rates, the FBR has not only increased revenue but also encouraged more taxpayers to register and comply with tax regulations.
Over the years, the collection of taxes on property transactions has become a substantial source of revenue for the FBR. The latest figures underscore the success of the FBR’s efforts to broaden the tax base and ensure greater compliance. The increased collection also reflects the growth in property transactions and the effectiveness of the FBR’s policies in capturing these transactions for tax purposes.
As the FBR continues to refine its policies and enforcement mechanisms, further growth in tax collections from property transactions is expected in the coming years. The agency remains committed to enhancing transparency and efficiency in tax collection, aiming to contribute more significantly to the national exchequer.
