Real estate sector: FTO asks FBR to stay vigilant against market prices

ISLAMABAD: The Federal Tax Ombudsman has strongly recommended to the Federal Board of Revenue (FBR) to remain vigilant regarding prevailing market prices in real estate sector.

“Own Motion” investigation was initiated by FTO Secretariat, Islamabad under Section 9(1) of the FTO Ordinance discrepancies and deficiencies in SRO 1264(1)12022 being lopsided and deficient and consequently creating hurdles in transparent, across the board smooth implementation of tax laws in the real estate sector.

Apart from considerable loss of revenue, the FBR’s inattention and ineptitude on this account leave the field wide open to the whims &wishes of provincial and the FBR field staff.

Accordingly, the FTO has recommended to the FBR that RTO, Bahawalpur should remain vigilant with regard to prevailing market rates in real estate sector and periodically revisit all the proposed rates of immovable properties through continuous exercise of making them compatible with the existing market rates.

Furthermore, FBR Policy wing (IR) should timely notify the additions & amendments, proposed by RTO Bahawalpur in this regard.

The FTO investigations were in relation to certain deficiencies in valuation of properties falling under the agricultural land category, private housing societies, commercial plots/buildings and farm houses.

The FTO has observed that the current valuation process of immoveable property is being carried out by the tax functionaries under the agenda of taxation reforms namely Pakistan Raises Revenue Projects (PRRO) on the instructions of the World Bank to develop uniform valuation table of immovable properties.

It is an ongoing process and is to be visited periodically by the respective RTOs. The FBR notified SRO1269 (I)/2022 on the basis of recommendations made by the respective RTO. The said rates were proposed by RTO Bahawalpur in consultation with relevant District Revenue Authorities to rationalise valuation table with the prevailing market rates.

It has been argued that the District Revenue Authorities in certain instances expressed their constraint not to revise valuation of certain properties beyond a certain percentage because the Punjab Revenue Board does not allow the increase beyond a certain percentage.

Copyright Business Recorder, 2023