Only Rs4 bn tax comes from Rs7,000 bn real estate deals

ISLAMABAD: There are three categories of the companies/AOP or persons involved in real estate business. The first category is of persons who work as real estate agents and take fees/commissions. They are 1951 and this year they gave Rs2.2 billion tax.

The second category is of those who do real estate business on ownership basis. They are 8,631 and they gave Rs1.31 billion tax. The third category is of builders/developers and their number is 9,522. They gave Rs791 million tax.

This tax amount is next to nothing. Real estate business is estimated to be at Rs7,000 billion annually. Bank officers work with real estate mafia and give them loans on low mark-up rates. It causes the wealth to accumulate in the private sector instead of industry.

The amendments that the government has made to the Finance Act 2016 will stem this illegal flow of money and the industry will flourish. Chartered accountants, lawyers and chambers of commerce have appreciated the amendment the FBR made to Section 68.

On the orders of Finance Minister Ishaq Dar, the FBR is holding on July 18 a meeting of all stakeholders in which PM’s Adviser on Revenue Akhtar Khan, FBR Chairman Nisar Muhammad and others will also participate.

Real estate representatives will oppose implementation of the law from 2006 and 2010 and will demand one time amnesty to which the government will agree; hence, the new law will not be implemented from back date.