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Saturday, June 22, 2024  
15 Dhul-Hijjah 1445  

Govt likely to increase tax on immovable properties’ purchase

Taxation of real estate came under discussion during FBR, IMF talks

In the upcoming budget, the government is expected to raise the advance tax on the purchase of immovable properties by non-filers, Business Recorder reported.

The news outlet while quoting sources said that discussions between the Federal Board of Revenue and the International Monetary Fund (IMF) have focused on increasing the withholding tax on non-filers for property purchases.

The Fund is in Pakistan for talks on a new bailout package as the country seeks a “larger and bigger programme” to have economic stability.

In order to broaden the tax base, the government has vowed to bring structural reforms and block mobile SIMs of non-filers. Earlier this week, the Islamabad High Court barred the government from blocking the mobile phone SIMs of non-filers and issued a stay order on the private company’s plea till May 27.

The country’s tax authority has imposed a three per cent levy on filers and a 10.5% tax on non-filers, which has generated nearly Rs80 billion in revenue this fiscal year.

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The lender has asked the FBR to further increase the advance tax rate for non-filers. Proposals include:

  • 3% tax for filers and 6-7% for non-filers on properties up to Rs50 million

  • 4% tax for filers and 12% for non-filers on properties between Rs50-100 million

  • 5% tax for filers and 15% for non-filers on properties over Rs100 million

If approved by Parliament, such changes could allow the FBR to collect over Rs100 billion in the next fiscal year, according to sources. The goal is to discourage non-compliance and increase tax revenues from the real estate sector.

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