Islamabad, Jan 28: Pakistan’s Federal Board of Revenue (FBR) has revealed a shocking disparity in wealth declarations, with only 12 individuals reporting assets exceeding Rs10 billion ($36 million). FBR Chairman Rashid Langrial emphasized that this underreporting reflects a significant failure to expand the nation’s narrow tax base.
Addressing the National Assembly Standing Committee, Langrial noted that economic activities must align with declared wealth. He proposed restricting major transactions, such as property purchases, to individuals whose tax records support such expenditures. Under this plan, property buyers could only purchase assets valued at 130% of their declared wealth, while transactions under Rs10 million would remain exempt.
Despite these proposals, critics voiced concerns about potential system disruptions. Tax advisor Ashfaq Tola argued that targeting 2.5% of high-value transactions (41,801 cases) should not jeopardize the entire real estate sector. Similarly, MNA Muhammad Mobeen Arif warned that restricting ineligible buyers might fuel money laundering.
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During the last fiscal year, nearly 1.7 million property transactions were recorded, with only 3,250 exceeding Rs50 million. Furthermore, 500,000 non-filers accounted for most real estate deals, underscoring the need for stricter tax compliance.
Langrial acknowledged systemic challenges, including corruption and outdated civil laws, as barriers to effective tax enforcement. While the FBR explores reducing property taxes to stimulate compliance, lawmakers remain divided on balancing reforms with economic stability.
The committee is set to reconvene to finalize recommendations, signaling a pivotal moment in addressing Pakistan’s tax and real estate transparency issues.
