Categories
Property Law Real Estate Deals Tax

Property Valuation FBR State Bank of Pakistan

FBR Pakistan Tax Property ValuationThe Finance Bill 2016 an amendment to Section 68 of Income Tax Ordinance, 2001 had been proposed under which commissioner Inland Revenue had been empowered to reject the collector value of provincial government and appoint valuation committee to ascertain fair market value to determine the income tax.

The amendment seeks to determine fair market value of property without regard to value fixed or notified by any provincial authority for the purpose of stamp or for any other purpose.
Property of posh areas in big cities like Karachi, Lahore, Islamabad which disclosed that the declared value was much lower than the open market value thus causing huge monetary losses to national exchequer.
It is generally observed by the Government Authorities that Property business in big cities had become source of parking undeclared or black money.
The amendment is proposed to be effective from July 01, 2016 but the commissioner IR could able to determine the valuation of past six years as envisaged in the tax laws.
The existing Section 68 explains fair market value as:
(1) For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property or rent, asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.
(2) The fair market value of any property 3[or rent], asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.
(3) Where the price referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner.
Further Section 222 of the Ordinance authorized the commissioner to appoint expert. It said: “The commission may appoint any expert as the commission considers necessary for the purpose of the Ordinance for the purpose of audit of valuation.”

Irfan Mir Halepota, Advocate Supreme Court of Pakistan.

Categories
Tax

Government of Pakistan announces new scheme turns black money into white

Government of Pakistan announces new scheme turns black money into white money.

Government of Pakistan has in January 2016 announced tax amnesty scheme for providing certain exemption to the persons who could not pay taxes on their income. The scheme will allow the tax-payers to broaden the tax net by simply paying 1% tax on their black money and turning it into white. Which mean after payment of 1% Tax their illegal income / money will become legal.

The government of Pakistan has decided to reward the tax evaders yet again by offering them another tax amnesty scheme. Instead of recovering tax from them, government has announced Grand Amnesty Scheme, according to which paying 1% tax on the black money will turn it into white, it is a great chance of all persons who want to convert their black money into white and legal money. The traders who haven’t filed any tax returns till date will be able to turn their black money into white by paying just 1% tax on their income. The scheme will be from 2016 to 2018. The Government of Pakistan must make strict money laundering laws to avoid spread of illegal money and its transfer from Pakistan to abroad.

Three slabs have been set in the scheme. In the first slab, 0.2% tax will be applicable on sales up to Rs. 50 million. In the second slab, a fixed amount of Rs. 100,000 will be deducted as tax for sales between Rs. 50 million and 250 million with an additional 0.15% tax on the total sales. In the third slab, tax of Rs. 400,000 with an additional 0.1% tax will be deducted for sales above Rs. 250 million.

But this scheme will not be helpful for the persons who had earned money from corruption or any other way, therefore, this scheme is not helpful for the government employees, officers and bureaucrats.