KARACHI: The Sindh government has started netting property dealers
in order to realise the potential of sales tax in the province, sources said on
Saturday.
Property
dealers provided services in sale, purchase and rental agreements, bagging huge
commissions, but their contribution towards sales tax on services is
negligible, they added.
An
official at the Sindh Revenue Board (SRB) said notices have been issued to
property dealers, providing services in major areas of Karachi, including
Defence, Clifton, Gulshan-e-Iqbal, etc.
The
official said the property dealers have been asked to get registered with the
provincial revenue authority, otherwise they would face punitive action,
including imprisonment.
The
SRB enhanced the efforts following the changes in the law at the federal level,
which resulted in higher declaration of values of immovable properties. The
prevailing collector rates for immovable properties notified by the Sindh
government are comparatively lower than the valuation table issued by Federal
Board of Revenue (FBR) for major cities of Pakistan. It is mandatory for buyers
and sellers to pay withholding income tax at the rates notified by the FBR,
therefore, most of the transactions are being declared at the FBR
valuation.
The
SRB official said that the higher declaration has resulted in additional
revenue to Sindh government in terms of property tax and stamp duties. The
official further said that the higher declaration also enhanced the commission
of property dealers, who provide services at the range of 0.5 percent to 5
percent.
The
provincial government imposed sales tax on services provide property dealers
effective from July 01, 2014. However, property dealers were less bother to
comply with the provincial tax laws.
The
SRB official said that now the board had taken serious notice and held meetings
with representatives of Defence and Clifton Association Real Estate Agents on
January 31, 2017. The meeting agreed that the association would be responsible
for registration of its members.
The
official said that the SRB would impose penalty of Rs100,000 on the
non-compliant property dealers. In case the taxpayer is remained non-compliant
after issuance of notice then, he would be liable to imprisonment for a term of
one-year.
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