Senate Body Proposes Easing Property Purchase

The Senate Standing Committee on Finance and Revenue on Wednesday approved increasing the existing property purchase limit for non-filers from 130 percent of asset value to 500 percent. Previously, under the proposal in the budget, those intending to purchase vehicles or immovable property would be required to prove that the declared value of the asset is within 130 percent of their income as declared in the previous year’s tax return. Moreover, under the proposal, buyers would be required to submit a formal application to the Federal Board of Revenue (FBR) confirming the availability of funds, either in their own name or that of their spouses or children, and that these were duly declared in their wealth statements. Finance Minister Muhammad Aurangzeb emphasized the need to restore public trust in the tax system. He said Pakistan is the only country where the concept of “non-filers” exists. He added that penalties on non-filers were already raised last year and that efforts are underway to expand the tax net. So far, other taxes on property transactions have either been maintained or slightly adjusted, but still remain subject to Parliamentary scrutiny. On the sale of property under Section 236C, the tax rate for active filers has been reduced from 3 percent to 1.5 percent. However, for late filers and non-filers, the rates remain unchanged at 6 percent and 12 percent, respectively. On the purchase side, the tax rate for active filers remains at 3 percent. Late filers will continue to pay a 6 percent tax, and non-filers will still face a 12 percent rate.