Barring non-filers from buying property to damage economy

By Khalid Mustafa
May 10, 2018

ISLAMABAD: Under the amnesty scheme, the government’s initiative barring non-filers from purchasing property valuing over Rs4 million may turn out to be very detrimental to Pakistan’s economy as this action is most likely to adversely dent the remittance flows.

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Most of the overseas Pakistanis, who used to invest in real estate in Pakistan, will not be able to invest more as most of them are non-filers. Many of the overseas Pakistanis purchase property in their names. Since the enforcement of the amnesty scheme under ordinance, 40-45 percent inflows have so far reduced from abroad in the real estate industry, a senior official of housing ministry told The News.

Out of almost $19-20 billion remittances, the official argued, $10 billion gets invested in real estate by non-residents per annum and if the condition that only taxpayers or filers can purchase property of over Rs4 million continues, then Pakistan’ economy will sustain massive damage as $10 billion inflows that come in real estate industry every year would be in jeopardy.

“More importantly the majority of the recipients or remitters are non-tax filers in Pakistan, once this investment avenue is blocked remittances are likely to crash,” he said. The official said: “Non-filers with certain taxation rates are allowed to do business and even they are allowed to deposit and withdraw the amount from the banks, but when it comes to real estate industry, non-filers are prohibited to purchase the property of worth over Rs4 million.”

Finance Minister Dr Mifta Ismail didn’t come up with any response when he was sent a question about it. Mifta read the question but opted not to offer answer. Chaudhary Afzal, a property dealer, told The News saying that there is a marked reduction observed in flows from abroad since the illogical condition is imposed.

Afzal said he used to receive calls from overseas Pakistanis asking for purchasing or disposing of plots, but since the condition is imposed cash flow from abroad has curtailed visibly. He said non-filers condition should immediately be withdrawn.

He said that this restriction on the purchase of property will compromise Pakistan’s ability to service debt repayment or Balance of Payment obligations in the future and is therefore likely to impact national security itself.

However, other countries like Philippine, India and Bangladesh have allowed fixed assets to be purchased through remittances by non- filers as a stated policy which has greatly increased the remittance levels to these countries.

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