News
Sunday, June 19, 2011
FBR mulls CGT on immoveable property
* RAC directed to propose methodology of imposing capital gains tax and basis for its enforcement in the country
By Sajid Chaudhry
ISLAMABAD: Revenue Advisory Council (RAC) of the Federal Board of Revenue (FBR) has started examining recommendation for imposing Capital Gains Tax (CGT) on the sale of immoveable property in order to gain revenue potential of the real estate sector in the country, official sources informed Daily Times on Saturday.
The federal government has already decided to continue exploring new avenues for the generation of domestic resources for the country, and RAC meeting is to continue in the next fiscal year despite announcement of the federal budget 2011-12.
Official sources informed Daily Times that the issue was discussed at the RAC meeting held in the federal capital, where officials from legal wing of the FBR brought it to the notice of members of the RAC that passage of the 18th Amendment did not slap any restriction on the imposition of CGT on the sale of immoveable property.
After the fact was brought to its notice, RAC was tasked to examine the rate of CGT on the sale of newly purchased immoveable property and the rate of tax on the sale of immoveable property purchased few decades back.
The RAC was also directed to propose to the government methodology of the imposition of CGT on the sale of immoveable property and basis for its enforcement in the country.
Official sources added that in the past, a group, comprising tax officials, working on tax reforms, headed by FBR Chief Income Tax Policy Sajjad Ali, had proposed to the government to impose 10 percent CGT on the sale of immoveable property after excluding impact of inflation, depreciation of Pak Rupee and actual price paid on the purchase from the present market price.
The official sources also informed that real issue in the imposition of CGT was the real valuation of such properties, as sellers and buyers of immoveable properties concealed actual present value and complete sale deeds on value some three times lesser than the present day value of immoveable properties in big cities.
Courtesy www.dailytimes.com.pk