Islamabad is cracking down on the use of black money in real estate dealings. Reports confirmed that the National Assembly Standing Committee on Finance and Revenue supported the Federal Board of Revenue (FBR) in this endeavour.

 

Authorities have formed a sub-committee to discuss the proposed tax amendment bill with all the stakeholders. The meeting between the committee and the FBR was chaired by MNA Naveed Qamar, who reviewed the bill. He formed the sub-committee to ensure the resolution of any outstanding issues between the FBR and relevant stakeholders.

 

The sub-committee will get the Revenue division to work with the Association of Builders and Developers (ABAD) to iron out a timeline for the application of the bill. According to reports, officials on the committee will submit their report within ten days to pinpoint all of the things that might affect the real estate market.

 

State Minister for Finance and Revenue Ali Pervaiz Malik told the committee that the proposed bill would place restrictions on non-filers and on activities such as buying vehicles and properties or parking funds in the Pakistan Stock Exchange (PSX).

 

The PSX declined by 600 points on Tuesday, which analysts are claiming might be the result of panic selling by non-filers ahead of the passing of the bill.

 

Ali Pervaiz told the committee that this would strengthen the FBR as it would increase tax compliance because of the bill’s passage. This is because a larger number of businesses operating in the grey market will register themselves and join the tax net.

 

The committee was reportedly told that ‘half of Pakistan’s’ run on black money. This is especially true for the real estate sector, which remains inflated because of corrupt officials and business owners using it to wash their money. As per reports, the FBR and tax officials have now been authorised to hire 1600 auditors to ensure that non-filers comply with tax laws.

 

FBR chairman Rashid Mahmood Langrial instructed the committee that authorities will now target high-income individuals first in an attempt to crack down on tax evasion. He mentioned that businesses refuse to register under the sales tax regime in order which is proved by the fact that a measly 42000 people have filed their sales tax returns.

 

The new laws, however will authorise FBR officials to block transactions involving tax evasion and black money. According to the FBR chairman, non-filers will also not be able to purchase any property valued at more than 10 million rupees.