KARACHI: The chambers should submit their proposals to the tax collection authority if they do not agree with the Federal Board of Revenue’s (FBR) recently announced valuation of industrial lands, said FBR Spokesperson Dr Muhammad Iqbal.
“In certain cases, the new rates that we announced may exceed their current value in some areas. This is a possibility, but we are ready to review such cases if the chambers submit concrete proposals,” he said while talking to The Express Tribune.
The government, in the first week of August, authorised the FBR to evaluate property rates (residential, commercial and industrial) throughout the country after long negotiations with representatives of associations of the real estate sector.
However, despite agreeing to some of the terms, some quarters are still showing reservations.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Karachi Chamber of Commerce and Industry (KCCI), on Monday, issued a statement in which they said the new valuation tables were not ‘acceptable’ to them.
“We do not completely oppose new valuation tables, however, we would like the government to remove a few anomalies that are present in them,” said the KCCI President Younus Bashir.
According to the FPCCI and KCCI statement, the government did not take stakeholders on board before issuing new rates and that the new valuation rates for the industrial land were too high.
The statement, therefore, urged the Finance Minister Ishaq Dar to take immediate notice of the issue and resolve the same on urgent basis so that transactions and dealings of the property sector could be resumed.
However, the FBR disagrees with them.
“The new rates were announced with the input of all stakeholders. The FPCCI president was himself present in all our meetings with the real estate sector; in fact, he mediated the FBR and people from different sectors,” said the FBR Spokesperson when asked about the input of the FPCCI.
The government and the realty sector representatives had agreed to increase the rates, which are higher than Deputy Collector (DC) rates but far lower than the prevailing market rates.
These rates have now become (with effect from July 31, 2016) the base for collecting withholding taxes from sellers and purchasers of the properties and the capital gains tax on profits made from these transactions.
The government says that it wants to promote investments and collect due share of taxes from the real estate sector. The new property valuation system will not only increase the government tax collection but also discourage the investments of billions of rupees of black money in the sector.