Islamabad: In an effort to tighten tax compliance, the Federal Board of Revenue (FBR) announced that non-filers will be subjected to a 7 percent Federal Excise Duty (FED) on the allotment or transfer of property starting July 25. This move targets increasing tax contributions from real estate transactions involving commercial and residential properties.

According to Zameen.Com, the new tax rate applies specifically to non-filers for the first allotment or transfer of open plots or residential properties, as well as commercial properties, if the buyer is not on the active taxpayer list (ATL) at the time of acquisition under section 181A of the Income Tax Ordinance, 2001. Conversely, buyers who have missed filing their income tax returns by the specified due date will incur a slightly lower FED rate of 5 percent.

For those who are listed as active taxpayers, the applicable FED on property transfers will be 3 percent of the gross transaction amount. This rate applies across the board to both the allotment or transfer of commercial properties and the initial allotment or transfer of open plots or residential properties, reinforcing the FBR's aim to encourage timely tax compliance among property buyers.