ISLAMABAD: The Federal Tax Ombudsman (FTO) has set a strict deadline of October 11, 2024, for the Federal Board of Revenue (FBR) to complete the long-delayed revision of property valuations across Pakistan.
This move follows a prolonged delay of over a year in updating the values of immovable properties, which are crucial for tax assessments and real estate transactions.
In an official notice issued to the Chairman of the FBR, the FTO expressed dissatisfaction over the delay and demanded an explanation for the extended postponement. The notice warns that if the FBR fails to provide a final compliance report by the given deadline, legal action under Section 12(2) of the FTO Ordinance, 2000 will be initiated against responsible FBR officials for “Defiance of Recommendations.”
The revision of property valuations plays a critical role in ensuring the accuracy of tax assessments and curbing tax evasion in real estate dealings. The delay has raised concerns about the fairness and transparency of property taxation across the country.
FBR’s Response and Progress
In response to the FTO’s notice, the FBR stated that it is actively working on revising the property values. Senior FBR officials have assured that the draft Statutory Regulatory Orders (SROs) for the new property valuations in major cities are in the final stages of preparation and will be released soon.
According to the FTO’s findings from an investigation conducted earlier, a report dated September 6, 2023, recommended that the FBR take immediate action. The investigation, initiated in response to a complaint, resulted in the FTO directing the FBR to update valuations based on recommendations from the Chief Commissioner Inland Revenue (CCIR) of the Regional Tax Office (RTO) in Hyderabad.
Despite these recommendations, the FBR has yet to complete the process. However, in a letter dated September 31, 2023, the Secretary of Court Matters at the FBR indicated that the Inland Revenue (IR) Wing is actively revising valuations nationwide. The draft SROs, which include revised property values for several cities such as Mirpurkhas, are expected to be finalized shortly.
Potential Legal Action
The FTO’s deadline highlights the urgency of the matter, as further delays could lead to legal consequences for the FBR. If the FBR fails to meet the October 11 deadline, the FTO may initiate legal proceedings for defying its recommendations, putting senior FBR officials at risk of penalties or disciplinary action.
This development underscores the importance of timely property valuation updates to maintain the integrity of the country’s tax system, ensuring transparency and fairness in real estate taxation.