Amnesty scheme will be introduced to regularise past transactions of property
ISLAMABAD: After holding hours’ long parleys with business and property tycoons, Federal Minister for Finance Ishaq Dar on Thursday announced that both sides agreed to jack up table of DC rates for 18 major cities in a bid to bring them at par with fair market value which would get final shape after undertaking the exercise in next five days.
The top official sources confirmed that both sides agreed for introducing amnesty scheme for regularising past transactions of property where fixed tax in the range of 2 to 5 percent will be imposed but the source of income will not be questioned. The government decided to abandon the valuation mechanism through the State Bank of Pakistan valuators with this condition that the table of DC rates will be jacked to bring it at par with fair market value. The FBR and property tycoons will prepare their table of DC rate value separately during five days and then both sides will sit together to evolve a consensus on table of DC rate for 18 cities of the country.
“First we want to evolve a consensus on jacking up tables of DC rates and all other issues including regularisation of past transactions will be finalised afterwards,” Dar told journalists after holding the final round of ongoing parleys with business and property tycoons here at the FBR’s headquarters on Thursday night.
Dar said that it was the third consecutive meeting held with business and property sector with the aim to resolve the lingering controversy over valuation of property.
“We have formed 13 member committee with the mandate to jack up tables of DC rates for 18 major cities in order to bring them at par with fair market value and bothsides would meet again on coming Wednesday or Thursday to finalize comprehensive agreement with full consensus,” the minister said. In the meanwhile, the minister said that the FBR team would also undertake its professional assessment in order to achieve consensus on valuation mechanism.
When this scribe inquired the minister about regularization of past transaction undertaken before July 1, 2016, the minister said that it was decided that first the DC rates would be finalized and all other issues would be resolved afterwards.
President FPCCI Abdul Rauf Alam said on the occasion that the parleys were underway from last two days and after participation of Finance Minister Ishaq Dar in his hectic schedule their all concerns were removed and now they could declare that the negotiation were heading towards positive outcome. He said that it was not issue of land developers or property agents but it was issue of whole business community and for whole Pakistan.
According to proposal under consideration included that one time amnesty scheme may be introduced to declare the property at actual cost and pay taxes at 2% to 5% on the amount of difference between declared cost and actual cost.
Such differential amount may be added to declared assets after availing such scheme and payment of taxes. Also, if the property is held for more than five years, no such taxes may be paid.
Another proposal is to jack up tables of DC rates for major 18 cities and subsequently for whole Pakistan by coming with ranges of 2 to 12 depending on value of property for different parts of the country. In one city like Islamabad and Karachi, the range of valuation of property could be distributed maximum up to 12 to 15 depending on the price value of piece of land.
The sources said that the government would not back out from this tax on valuation of property as it would help plugging black economy. “The conservative estimates suggest that the FBR can collect at least over Rs 30 billion with revised mechanism of valuation of property,” said the official.