FBR to Increase Property Taxes for Non-Filers in Revenue Push

Islamabad, In an effort to boost national revenue and ensure compliance with tax laws, the Pakistani government, through the Federal Board of Revenue (FBR), is set to increase advance taxes on property purchases for non-filers. This policy revision is part of a broader strategy to enhance the tax base, particularly in the real estate sector, and is in line with new conditionalities agreed upon with the International Monetary Fund (IMF).

According to Zameen.Com, the new tax structure, pending legislative approval, would significantly raise the withholding tax rates on property transactions for non-filers. This adjustment is expected to potentially generate over Rs100 billion in the next fiscal year. The proposed tax rates are structured to escalate with the value of the property: properties valued up to 50 million would incur a 6-7 percent tax for non-filers, compared to 3 percent for filers; properties between 50 and 100 million would see a 12 percent rate for non-filers versus 4 percent for filers; and properties over 100 million would be taxed at 15 percent for non-filers, compared to 5 percent for filers.

This move is part of a series of measures the Pakistani government is taking as it negotiates new loans with the IMF, which has recommended that the government broaden its tax base by tapping into previously untapped segments. Among the more stringent measures being considered is the potential blocking of mobile SIM cards for non-filers, signaling a tough stance on tax evasion.

Currently, the tax structure imposes a 3 percent tax on filers and a 10.5 percent tax on non-filers, with the aim of collecting Rs80 billion this fiscal year. The proposed increases are expected to not only boost revenue but also discourage tax avoidance by aligning the cost of non-compliance with the benefits of filing tax returns.