FBR?s property tax collection climbs 58 percent in July-March

KARACHI: The Federal Board of Revenue’s (FBR) collection of
property tax surged 58 percent during the first nine months of the
current fiscal year of 2018/19 as it increased valuation of
properties, experts said on Wednesday.The finance ministry’s
latest data showed that the collection of property tax sharply
increased to Rs7.6 billion in the July-March of FY2019 compared
with Rs4.817 billion in the corresponding period of the last fiscal
year.The FBR increased property valuation by 20 percent in February
2019 in order to raise collection through withholding tax.Sources
said the FBR also enhanced monitoring of collection of property tax
by the provinces that added up to the revenue. Provincial
governments also collect property taxes based on its own
valuations.In August 2016, the FBR notified table of valuations for
around 20 cities to monitor the open market values of immovable
properties and to determine withholding tax. The valuations were
meant for increasing withholding tax collection from buyers and
sellers of immovable properties. The valuations however created
deterrence against declaration of fair values of properties.The
previous government last year announced to abolish the FBR
valuation table in addition to set up a directorate to keep values
of immovable properties under vigilance. The government, however,
linked the abolishing of the FBR valuations table with the
functioning of the directorate. But, since the body is yet to start
working, the FBR valuations are still existent.Tax experts said the
establishment of the directorate created a fear among people who
preferred to declare property values near to the fair market
values. The valuations notified by the provinces are very low, but
the property tax collection increased significantly due to
transactions at the higher rates, they said.The Punjab government
led the property tax collection among all the provinces as it
collected Rs4.36 billion during the period under review compared
with Rs2.59 billion in the corresponding period of the last fiscal
year, posting a 64 percent increase, according to the ministry of
finance’s data.Sindh government posted a 63.56 percent growth in
collection of property taxes.The province collected Rs2.375 billion
during the July-March FY2019 compared with Rs1.45 billion in the
same period of the last fiscal year. The property tax collections
by Khyber Pakhtunkhwa and Balochistan were Rs730 million and Rs140
million, respectively.Sources said the ongoing drive against black
money and undeclared assets would promote declaration of fair
values and it would subsequently increase the revenue collection
from property buying and selling as well as rental income.
Source: FS – All-News2-Economy
FBR?s property tax collection climbs 58 percent in July-March