Islamabad, Feb 11: The Sub-Committee of the Standing Committee on Finance and Revenue has recommended deferring the consideration of the proposed Section 114C of the Tax Laws (Amendment) Bill 2024 until the Federal Board of Revenue (FBR) completes the necessary technological upgrades to its online systems and applications. The sub-committee, chaired by MNA Bilal Azhar Kayani, ruled that the FBR should demonstrate the updated online systems to the Standing Committee before moving forward with the new tax law aimed at ensuring tax compliance in the property sector.
The proposed amendment is designed to restrict property purchases to tax filers who can demonstrate sufficient declared resources. However, the sub-committee expressed concerns that stricter measures could lead to capital flight. Despite this, officials are optimistic that the introduction of an updated FBR app will streamline property transactions. The FBR has committed to providing a demonstration of the new system, with one potential option being to revisit this section during the budget process in June 2025.
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In the interim, the committee advised that FBR focus on finalizing the technological changes needed to ensure the system is user-friendly, minimizing any glitches that could affect taxpayers and users. The committee also suggested revising certain terminology in Section 114C, including replacing the word “Board” with “Federal Government.” This change would empower the government to set value thresholds for property transactions, ensuring that first-time property buyers and lower-income citizens are not adversely impacted by the new regulations.
Further revisions to the bill introduced clearer definitions for terms like “eligible persons,” “immediate family members,” and “sufficient resources” for property transactions. The new definitions expand eligibility to include individuals who can justify their sources of investment and expenditure, and immediate family members now include dependent children. The revised “sufficient resources” clause also encompasses assets like local and foreign currency, gold, stocks, and even barter transactions.
Sub-committee chairman Kayani noted that the majority of real estate transactions involve properties valued under Rs. 5 million, suggesting that stricter documentation requirements should not burden first-time homebuyers. The committee proposed allowing non-filers to purchase property under specific conditions, aiming to balance regulatory compliance with practical accessibility for potential homeowners.
