The government is considering levying capital gains tax on immovable property, for which it has to introduce a bill in parliament for approval, says an official of the Federal Board of Revenue (FBR).
According to the official, the government is mulling over the proposal after the Law Division, in response to a query from FBR, said under the 18th Constitutional Amendment the Centre could impose capital gains tax on immovable property after getting a bill passed from parliament.
In this regard, he said, two proposals were under study – either to introduce the capital gains tax in the budget for 2012-13 or prepare a bill and present it in the National Assembly for approval during the course of upcoming financial year 2011-12.
Some officials of FBR were of the view that tax authorities should complete required administrative and paper work and prepare a draft of the bill. However, it should only be introduced in parliament in the upcoming financial year when FBR found it difficult to meet the annual tax collection target of Rs1,952 billion and wanted to take some additional revenue-generating measures.
The Law Division, in its reply to FBR, also said the federal government could not impose gross asset tax on movable and immovable property as it fell under the domain of provinces after the introduction of 18th amendment.
Published in The Express Tribune, June 25th, 2011.
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