FBR documents Rs75 billion properties under amnesty scheme in July-March
KARACHI: The Federal Board of Revenue (FBR) has documented Rs75 billion worth of properties during the first nine months of the current fiscal year of 2018/19 under a tax amnesty scheme; although the revenue collection fell a quarter year-on-year on uncertainty about the concessions, sources said on Tuesday
The sources said the money has been whitened during the July-March period of 2018/19 despite slowdown in economic activities.
The FBR collected Rs2.25 billion from the amnesty during the first nine months of the current fiscal year.
The collection was however down 24 percent compared with Rs2.93 billion in the corresponding period of the last fiscal year.
The sources said unclear policy of the FBR resulted in decline in revenue collection during the year.
In December 2016, the government announced the amnesty through Income Tax (Fourth Amendment) Act 2016 by inserting a section 236W into the Income Tax Ordinance 2001.
Under the section, the purchaser of immovable property allowed to pay withholding tax at three percent.
In the last budget, a law was however introduced to withdraw the amnesty available for buying of immovable properties.
Sources said the Federal Board of Revenue failed to implement the changes brought through the Finance Act 2018 and the purchasers of immovable properties took advantage of inefficiency of the revenue body.
A relaxation was granted through a section 111(4)(c) into the income tax ordinance under which the purchaser would not be asked about the source if the amount is higher than the district collector value and not higher than the Federal Board of Revenue valuation table.
The government, through Finance Act 2018, established a Directorate General of Immovable Properties under a section 230F of the ordinance to stop allowing amnesty to black money.
It was announced that the changes would only be implemented when the government would notify it through an official gazette. The notification of activating the directorate was however not issued.
The Federal Board of Revenue introduced the implementation rules and posted staff about the directorate.
Values of declared properties rose 12 percent year-on-year in March when compared with same the month of the last year. Total Rs13.50 billion has been whitened in March compared to Rs12 billion in the same month a year earlier.
The revenue collection during the month increased to Rs402.45 million compared with Rs358.55 million in March 2018.
The scheme has whitened around Rs223 billion in the property transactions during December 2, 2016 to June 30, 2018.