FBR issues 400 notices to probe sources of investment in Dubai real estate

KARACHI: Federal Board of Revenue (FBR) has directed individuals who invested in Dubai real estate to furnish details of their sources of investment, officials said on Wednesday.

“Around 400 notices have been sent to individuals to provide sources for making investment in Dubai real estate business,” a FBR official said on Wednesday.

The board has started questioning sources of investment from Pakistanis who have been identified for having ownership in Dubai real estate business.

The official said five regional tax offices (RTOs) and two large taxpayers units (LTUs) in the Sindh Region have jointly served over 100 notices to individuals who have purchased properties in Dubai.

Around 5,000 to 7,000 people have been identified with investment of around Rs1.1 trillion in Dubai real estate business, according to the latest information revealed by Geo TV.

The list includes names of politicians, including members of parliament, retired generals, former judges, real estate tycoons, businessmen, bureaucrats, lawyers, actors, singers, and media personalities.

The FBR officials said the notices have been sent in different categories to dig out the sources of investment. The notices have been sent to both filers and non-filers of income tax returns.

In non-filers category, the individuals, who have not filed their return of any one or more years during the past five years, have been asked to comply with the law. “Otherwise non-filers can file returns of past 10 years along with declaration of wealth statement,” the official added.

The official said the FBR will launch audit of the individuals, who have declared their investment. “In case an individual is filer the FBR will obtain a statement under an oath,” the official added.

In the past the FBR and other investigative agencies approached Dubai authorities to provide details of Pakistanis regarding investment made in the real estate sector, but the Dubai authorities were constantly refusing to share the information. However, Dubai authorities agreed to share specific information where individual details are provided.

Now, the FBR will be able to obtain specific information from Dubai authorities under avoidance of double taxation treaty, the official said.

Pakistan has so far signed bilateral taxation treaties with at least 64 countries, according to the FBR’s website. Besides, the country became signatory of a number of multilateral accords to improve the tax system’s efficiency.

Government stepped up efforts to finalise a national action plan to ensure transparency in tax matters and economic affairs to become member of global reform forum Open Government Partnership (OGP), a group of 64 nations to implement open government reforms around the world.

Pakistan has already met the eligibility threshold for membership to OGP, achieving 15 out of the 16 criteria. In 2016, the country became a signatory to the Organization for Economic Cooperation and Development’s multilateral convention on mutual administrative assistance in tax matters after signing the convention. The convention, which has been signed by more than 80 countries, would facilitate international cooperation on national tax laws and provide administrative cooperation among member countries to combat tax evasion.