What progress has been made in bringing builders, including housing societies, into the tax net, details revealed – Business & Economy

ISLAMABAD: The Federal Board of Revenue (FBR) has failed to bring developers and builders, especially new housing societies, into the tax net.

FBR is expected to release incremental value of immovable properties from July 1, 2024. FBR has started the process of updating property valuation tables across Pakistan in consultation with provincial authorities.

According to a Business Recorder report, sources said that the last valuation of immovable properties was done in March 2022, after the FBR’s commitment to bring new housing societies into the tax net, immovable properties across the country in the last 2 years. The new rates of properties have not been increased.

It was agreed between the FBR and the real estate sector that currently the FBR will not release the increased value of immovable properties in August 2023.

Committees were formed in each city to work on the new value in consultation with relevant associations of the real estate sector. Later, the developers and builders coordinate with the regional tax offices and finalize their valuation and the fixed rates are communicated to the FBR. However, no further progress was made on the matter.

The new rates for immovable properties are expected to be announced in June 2024 with effect from July 1, 2024.

The Federal Tax Ombudsman (FTO) had directed the FBR that housing schemes in posh areas should be valued on a real-time basis to implement accurate valuation of immovable properties.

The FBR had received instructions from the Federal Tax Ombudsman that the valuation table should include the cost of built-up structure, housing schemes in posh areas can be valued on a real-time basis.

Certain residential schemes announced by real estate developers have not been included in the valuation table.

According to the Office of the Federal Tax Ombudsman, the lack of uniform standards has resulted in inconsistencies and inconsistencies in determining fair market value, three main methods should be used when determining fair market value, i.e. cost, comparability and income. Capitalization.

Since no SOPs were available, FBR authorities were advised to take guidance from the International Valuation Standards (IVS) prepared by the International Valuation Standards Council (IVSC). Which are generally accepted around the world as follows.