FBR mulls law to prevent undervaluation
Law will allow the annexure of property by the FBR at price 10% above declared value.
ISLAMABAD:
The federal government has decided to introduce a new law along the lines of its Indian counterpart to curb the undervaluation of property on tax returns.
The law will give the Federal Board of Revenue (FBR) the authority to purchase any piece of property at 10 per cent above the declared value and then sell it off in an open auction.
According to a senior official of the ministry of finance, a reforms working group has been formed in this regard to consider different recommendations to halt undervaluation of property.
The official mentioned that a law exists in India that allows the tax authorities to annex a piece of property after paying the owner 10 per cent more than the declared value of that property and then auction off the property in the open market. He mentioned that the Indian law will be modified to suit Pakistan.
Sources said that a proposal to let the tax authorities check property valuations on submitted returns without notice is also under consideration. Another proposal to divide the city into zones and then have benchmark property valuations for each zone is also under consideration.
Both of these proposals will help the FBR in identifying returns with undervalued property.
Published in The Express Tribune, November 17th, 2010.
The federal government has decided to introduce a new law along the lines of its Indian counterpart to curb the undervaluation of property on tax returns.
The law will give the Federal Board of Revenue (FBR) the authority to purchase any piece of property at 10 per cent above the declared value and then sell it off in an open auction.
According to a senior official of the ministry of finance, a reforms working group has been formed in this regard to consider different recommendations to halt undervaluation of property.
The official mentioned that a law exists in India that allows the tax authorities to annex a piece of property after paying the owner 10 per cent more than the declared value of that property and then auction off the property in the open market. He mentioned that the Indian law will be modified to suit Pakistan.
Sources said that a proposal to let the tax authorities check property valuations on submitted returns without notice is also under consideration. Another proposal to divide the city into zones and then have benchmark property valuations for each zone is also under consideration.
Both of these proposals will help the FBR in identifying returns with undervalued property.
Published in The Express Tribune, November 17th, 2010.