FBR urged to redraft reporting rules

KARACHI: Tax practitioners on Friday urged the Federal Board of Revenue (FBR) to redraft rules related to reporting of ‘suspicious’ transactions by jewelers and real estate agents.

Karachi Tax Bar Association (KTBA) said the reporting requirements are investigative in nature and a businessman should not be assigned to do this.

“Never ever it has ever been witnessed that a shopkeeper has been asked to make arrangement for conducting verification through reliable independent sources to ensure the transaction is risk-free and is made out of taxable sources of the buyer which he duly declared in his return and wealth statement,” KTBA said in a letter to the FBR Chairman Shabbar Zaidi.

The tax bar organised a consultative discussion of members and all were unanimous that the FBR should redraft the rules.

The bar appreciated the efforts of the FBR for documentation of the economy, but the steps intended to identify suspicious transactions through jewelers and real estate agents are far from realities, it said.

The draft of rules said jewelers and real estate agents are the designated individuals for the transaction reporting. Such persons are made responsible to identify transaction where they believe the transaction is executed as benami transaction.

The beneficial owner of the transaction is different than the actual individual making the transaction. The individual is required to conduct an independent verification of the customer making the transaction.