New Taxes are Disaster for Investors Specially Overseas

[syed.zaidi.dha (Hamad)]

I have spotted following news article in today’s Dawn News. To me it is looks like invest in property of Pakistan is over. Need experts opinion on this. Thanks

" New FBR rules come into force for registration of immovable properties

2023-08-01

RAWALPINDI: After the introduction of new rules for sale and purchase of property by the Federal Board of Revenue (FBR), the district administration land revenue branch stopped registration of immovable properties in Rawalpindi and no registration was done on Monday.

A senior official of the district administration said a clearance certificate from the FBR had been made mandatory for the buyer. The clause of filer and non-filer will also be required for the clearance certificate.A five per cent tax will be paid by the filer and 20pc by the non-filer.

Heavy taxes have also been imposed under withholding tax section 236C and 236K and in the light of section 7E amendments in Income Tax Ordinance 2001 through Finance Act 2023.

Under 236C, the filer has to pay three percent of the current rate and the non-filer has to pay six percent.

Under 236K, the filer has to pay three percent tax of the current rate and the non-filer has to pay ten and ahalf percent. Apart from this, now under 7 E, more tax has been levied in the name of Non-Objection Certificate.

The responsibility of tax collection for registration, recording and transfer of any immovable property has been placed directly on the district collector and registrar.

Transactions of Rs5 million or above should be done through bank certificate and pay order and receipts must be produced for the registration of immovable properties. Staff Reporter

"

[engrmujeeb92 (Mujeeb)]

To bring the property into the tax net and document the economy is the hour of need.
But the time, tax percentage, and method are not appropriate.

There are many merits and demerits but the few are the merits are under.

1. Gambling on property will be discouraged.

2. By validating the actual DC rates buyer will be able to evaluate the property more clearly.

3. Property will not be the heaven of black money.

4. Unnecessary investment in property which slows down the economy will be halted.

[isloo1]

Increasing the tax and implementing it strictly is what a good govt should do. But not using tax as a weapon to strangulate the business. The form A for 7E fiasco, that requires clearance of Inland Revenue Commissioner has done just that, i.e., strangulated real estate transactions and killed tax collection on it.

The best proposal is to link FBR officials salaries with tax collection. Then you’ll see them running around like a headless chickens!!!