Over 10,000 property owners evading tax

Constructed buildings are registered as under construction

MULTAN: More than 10,000 commercial and residential buildings registered as under construction to evade property tax, an investigation by excise department revealed on Sunday.

Excise department officials said that over 10,000 commercial and residential buildings were registered as under construction by the owners just to get rid of the property tax.

However, these buildings were completed three years ago, they added.

The officials maintained the excise department sent final notices to the owners of commercial and residential buildings for non-payment of property tax. In case of non-payment of tax even after the final notice, the buildings would be sealed, they warned.

The scam was unearthed after a secret investigation in departmental records of the registered under construction buildings.

The probe disclosed that more than 10,000 commercial and residential buildings have been completed but their property tax was not being paid by the owners. Many property owners have submitted the tax after the issuance of last notice but thousands of these owners have started forwarded suggestions by authoritative personnel.

For non-payment of property tax before June, the tax will be received from the owners after sealing their properties. Most of the owners of these buildings included traders and government officers.

Tax evasion is a pervasive problem which affects all sectors of Pakistan’s formal and informal economy and ultimately damages our country’s prospects for development and growth.

Those with cash to spare keep coming up with innovative ways to hide it from the taxman.

For the longest time, the real estate sector has been a preferred mode of stashing away excess income which may or may not have come from legal means. Given the complexity of our tax code and the loopholes it contains, it has never been difficult to evade taxes on property.

Ostensibly to bring these property owners into the tax net, the government announced an amnesty scheme which requires property owners to declare assets by paying a meagre three per cent tax rather than the 35% rate which is normally applicable.

Regardless of this huge incentive so far only about a few thousand individuals have declared their properties under this scheme according to the Federal Board of Revenue.

Published in The Express Tribune, January 15^th, 2018.