Tax recovery from builders: FBR’s policy wing submits report to FTO

ISLAMABAD: Following intervention by the Federal Tax Ombudsman (FTO), the Policy Wing of the Federal Board of Revenue (FBR) has submitted a report to confirm chartered accountant (CA) firms have been notified vide SRO 399(i) 2024 to recover the taxes from developers/ builders who are obliged to submit completion certificates of real estate projects.

Sources said that the FBR-IR Policy Wing has submitted a report before the FTO and stated that vide SRO 399 (i) 2024, the FBR has notified the firms of chartered accountants having a valid Institute of Chartered Accountants of Pakistan (ICAP)-QCR rating of “satisfactory” as available on the website of the ICAP (www.icap.org.pk) for the purpose of certification.

The FBR has issued a notification at the request of tax lawyer Waheed Shahzad Butt, who raised the issue with the FBR chairman and on silence on the part of the FBR, moved a public interest complaint before the FTO to take cognisance of the matter.

Butt said that it is a legal requirement under Section 100D, for which he has approached the FBR chairman, Member Operations-IR, Member Legal, and Member Policy FBR and moved application before the FTO for investigation of the matter. This negligence was not only causing undue hardship for developers but also posed a threat to the integrity of the tax system and the national exchequer. In the case of developers, according to sub-clause (ii) (B) of clause (e) of subsection (3) of Section 100D read with sub-clause (ii) of clause (e) of Rule 9 of the 11th Schedule, the completion of the project shall be certified collectively in the following manner, namely: the map approving authority or NESPAK shall certify that landscaping has been completed on or before the 30.09.2023 and a firm of CA having an ICAP QCR rating of satisfactory, notified by the Board for this purpose, shall certify that at least 50 per cent of the plots have been booked for sale and at least 40 per cent of the sale proceeds have been received by the 30.09.2023 and at least 50 per cent of the roads have been laid up to sub-grade level as certified by the approving authority of NESPAK, Waheed added.

Referring to FTO notice dated March 1, 2024, the FBR has notified the firms of CA having an ICAP-QCR rating of “satisfactory”. The grievance of the complainant has been addressed and it may be treated as compliance report, FBR report to the FTO added.

Copyright Business Recorder, 2024