ISLAMABAD: Federal Board of Revenue (FBR) has postponed the implementation of new valuation of immovable properties for major cities of the country for calculation of tax.
The FBR on June 21, 2019 issued proposed valuation of immovable properties located in 19 different cities of the country. The FBR had invited comments from stakeholders before implementing the new valuation from July 01, 2019.
The tax authority a day earlier issued a notification stating that the proposed rates of immovable properties were under consideration and would be notified through official gazette,
Therefore the prevailing valuations of immovable properties are remained applicable till the issuance of official notification for new rates.
In order to document the real estate sector and boost the revenue collection the FBR in August 2016 issued its valuation of immovable properties for various cities of the country. The valuations were issued considering very low rate of District Collector (DC) rates fixed by the provincial government, which caused very low tax collection. On the other hand the fair market values are many times higher than the DC value.
Initially in August 2016 the FBR valuation tables were even very lower than the fair market value. However, the revenue collection visibly increased under this head.
Later in February this year the FBR revised upward the immovable properties valuation by around 20 percent to bring the FBR rates closer to the fair market value.
Even this increase was lower than the fair market value and large sum of black economy is remained parked in this sector of the economy.
Now the FBR has proposed significantly higher rates for immovable properties in 19 major cities of the country, which included Islamabad, Karachi, Lahore etc.
The FBR believed that the new laws which had been implemented through amendment to Income Tax Ordinance, 2001 would help in documenting the real estate sector besides increasing the valuation of immovable properties.
A directorate general of immovable properties has been set by under the Ordinance, under which the misdeclared values of immovable properties would be confiscated by the authorities.