NA panel supports FBR move to curb realty black money
ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue has endorsed the Federal Board of Revenue’s (FBR) efforts to prevent black money in real estate and formed a sub-committee to review the proposed tax amendment bill with relevant stakeholders.
The committee meeting, chaired by MNA Naveed Qamar, reviewed the Tax Laws (Amendment) Bill 2024 and appointed a sub-committee to resolve the issues between the FBR and stakeholders on the bill.
As per the terms of reference, the sub-committee will ensure that the Revenue Division engages the Association of Builders and Developers (ABAD) to determine the quantum and timeline for eligibility. The sub-committee will submit its report within 10 days, with the first meeting scheduled for Thursday (Jan 23) to identify all those factors that might impact the property market.
State Minister for Finance and Revenue Ali Pervaiz Malik informed the committee that the bill will empower FBR to increase tax compliance and bring the undocumented sector under the tax net. He said that the previous government remained silent on non-filer issues for 75 years. “Our government is committed to addressing this issue,” he claimed.
Constitutes sub-committee to address stakeholders’ concerns
Under the proposed law, the state minister said non-filers will face restrictions such as buying properties and vehicles or investing in businesses or the stock market. However, there will be an exemption for low-income people. The committee was informed that half of Pakistan’s economy is run on black money, while tax authorities have now been cleared to hire 1,600 auditors to track non-filers and enforce the tax laws on their finances.
FBR Chairman Rashid Mahmood Langrial briefed the committee that the changes are designed to target high-income individuals (tax evaders) and businesses. He said that non-filers can purchase property valued up to Rs10 million.
He said that there is a massive underreporting of the sales tax. Only 42,000 people have filed their sales tax returns. Many businesses are reluctant to register under the sales tax regime.
The new laws will also grant FBR officers additional powers like blocking transactions involving black money and tax evasion. He further said the proposed bill introduces measures to recruit 1,600 auditors to strengthen revenue enforcement.
The committee expressed concerns about some proposed amendments. The members pointed out challenges related to significant corruption and capacity issues within the FBR. They also observed serious economic implications for the country.
Mr Qamar emphasised the need to increase overall tax collection and enhance the registration of fillers in the network and directed the chairman of FBR to address the controversies in the bill and propose solutions to mitigate the economic impacts of the bill in the country.
He urged the finance division to take all stakeholders into confidence and remove anomalies.
Published in Dawn, January 22nd, 2025