Islamabad, Jan 31: The Federal Board of Revenue (FBR) is evaluating a proposal that would allow property transactions up to Rs. 10 million without the necessity for buyers to disclose the source of their income. While this move aims to simplify property purchases, it has sparked concerns among lawmakers, who argue that it could create loopholes for money laundering and the influx of untaxed black money into the economy.
In response to these concerns, the Association of Builders and Developers has suggested increasing the exemption limit to Rs. 25 million, or even up to Rs. 50 million for first-time homebuyers. However, tax officials warn that such high exemption thresholds could essentially act as a continuous tax amnesty, undermining the country’s tax structure.
The FBR has put forward a proposal that would limit property purchases to 130% of the buyer’s declared liquid assets. Any excess beyond this would require immediate proof of income. To ensure this proposal is practical, the National Assembly Standing Committee on Finance has recommended expanding the definition of liquid assets to encompass assets such as gold, bonds, livestock, and immovable property. This change would ensure that taxpayers are not forced to liquidate their current assets in order to purchase new property, providing more flexibility in the process.
Despite these suggestions, FBR officials have acknowledged a critical issue: the lack of a robust platform for buyers to submit proof of their financial resources before finalizing property transactions. Lawmakers are calling for a trial phase to test the effectiveness and efficiency of any proposed system before its full-scale rollout. This cautious approach is essential to avoid any potential complications or loopholes in the implementation of the new policy.
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As this debate continues, it remains clear that the balance between easing property transactions and preventing financial irregularities is crucial. The final decision will have significant implications for the real estate sector, tax compliance, and the overall economic landscape. Only time will tell whether these proposals will move forward in their current form or undergo further adjustments to address these concerns.
