New Tax Legislation on Property

New Tax Legislation on Property

via Jang

ISLAMABAD: The president of Pakistan on Sunday promulgated the Income Tax (2nd Amendment) Ordinance 2016 to implement the valuation rate of property, which would come into force throughout the country with immediate effect.

The ordinance came into force when the Federal Board of Revenue (FBR) and property stakeholders struck a deal in this regard a day earlier.According to the ordinance, civil servants and military officers are entitled to get a 50 percent waiver in the Capital Gains Tax on the sale of a plot given to them by the government.

The heirs of martyrs would be exempted from Capital Gains Tax and withholding tax on the plots given to them by the government.Federal Minister for Finance Ishaq Dar, while addressing a press conference at the Punjab House, announced to repeal the Customs Act 1969 from Pata.

The government promulgated the ordinance to implement the valuation rate of fair market value of property, which would increase its market value in the range of two to 10 times on an average for major cities.

Ishaq Dar said, “We want to avoid holding up of transactions because of confusion so the government decided to adopt the path of the promulgation of a presidential ordinance to this effect. It will help implement the Turkish model to increase tax-to-GDP ratio from 10 to 26 percent. We expect that this new mechanism of evaluation of property for the purpose of federal taxation will fetch seven to eight times more revenue to the tune of Rs60 to Rs70 billion in the current fiscal year while the government had collected Rs8 billion from property transactions in the last financial year.”

Regarding the repeal of the Customs Act from Pata, the minister said that on the request of the KP government, the federal government had implemented the Customs Act 1969 in Pata and now the government again repealed it on the recommendation of the KP government.

The federal government, he said, had never made any issue of its ego so first it was implemented when the KP CM had moved an official summary and now they had asked to repeal it and PM Nawaz Sharif granted an approval after his return from London.

KP moved the summary and the PM granted approval and forwarded it to president for getting its final assent, the minister said and added that now it was repealed after president’s approval.

Flanked by PML-N leaderEngineer Amir Muqam, Capt (R) Muhammad Safdar and others, the federal minister said the government exempted dependents of Shaheed’s from payment of evaluation of property tax on first land transaction and 50 percent tax would be waived off for Pakistan civil servants for getting plots.

To a query regarding exemption for property transactions in DHA, the minister said that there was no exemption for DHA and only dependents of martyred could avail themselves of this tax facility for the purpose of first transaction.

Answering another query regarding agreement with property dealers, the minister said the Centre would make contacts with the provinces as their DC rates would remain intact because the federal government empowered the FBR to notify the valuation of fair market of properties for the purpose of payment of federal taxes such as withholding tax and capital gains tax. Now the provinces could adopt new rates so they could reduce the rate of stamp duty accordingly to facilitate the business.

via The News