Senate committee orders FBR to withdraw new real estate appraisals – Journal



ISLAMABAD: A parliamentary panel on Monday ordered the withdrawal of the 100 to 700% increase in the valuation of real estate properties in the 40 urban centers of the country for the purposes of tax collection notified by the Federal Council of Revenue (FBR) December 1.

Based on comments from senators and protests from real estate players, JUI’s Senator Talha Mahmood, while chairing the meeting of the Standing Senate Committee on Finance and Revenue, also asked the RBF to come up with a table assessment revised in consultation with all stakeholders within 15 days.

Lead the consultation with stakeholders for the publication of the revised tables

He said it was inappropriate for tax authorities to take action without taking relevant stakeholders in confidence and that such policies were neither in the best interests of companies nor of the FBR itself. He said business transactions take time to materialize and therefore there should also be a mechanism and timeline in which transactions finalized before the new SRO would not be affected.

Decision making should be based on stakeholder participation, but economic improvement and income growth could not be expected when there was a lack of trust between government agencies and stakeholders.

The committee ordered that during the consultation process for a new mechanism, previous regulations and arrangements should be put in place so that businesses can operate as usual. For all future regulations, the RBF should allow sufficient time for the industry to comply and adjust its activities accordingly.

The chairman of the RBF, Dr Ashfaq Ahmad, told the committee that the objective of the revised property valuation is to gradually tax real estate properties on the basis of market prices. He said that just a few years ago there was no proper real property appraisal system and the provinces were not ready to reach consensus. Therefore, the FBR was given the responsibility. He said house prices were first set under the PML-N government and a tax amnesty program had also been proposed based on these prices.

He said the RBF had set the best possible property valuation under the given circumstances, but there was always the possibility that the valuations for some areas were higher or lower and therefore the RBF was ready to review those valuation tables. .

PML-Q Senator Kamil Ali Agha said there was no proper mechanism for property valuation, but it was not possible for parliament to approve everything the government proposes .

He suggested that there should be a formula and an independent valuation of values ​​to ensure a fair valuation of the property and the resulting taxation.

Senator Saleem Mandviwalla noted that a way forward should be explored rather than criticizing the tax machinery. He said the RBF had fixed property values ​​since the PPP mandate and that there was a need for a national consensus on the matter.

MQM’s Senator Faisal Sabzwari said the committee did not want to destroy the real estate industry but also could not allow black money to be invested in the real estate market.

Representatives of property dealers and chambers of commerce and industry in Rawalpindi and Islamabad said the RBF had imposed new valuation tables without making them confidential and, as a result, bringing real estate transactions to a complete halt. . They said people had signed sales and purchase contracts, but at the time of the transfer they were shocked that their tax rates had increased from 100 to 700 pc.

They also pointed out that no transaction could be completed since SROs were issued on December 1 and some real estate appraisals were so absurd that clients were willing to sell their assets at less than half of the appraised price to the government.

Posted in Dawn, December 7, 2021



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