The Federal Board of Revenue (FBR) announced on Friday that it would raise property valuations to nearly 90% of market prices to collect an additional Rs70 billion next fiscal year.
This change aims to address compromises between politicians and traders that have previously hampered the tax body. Of the projected Rs70 billion, Rs30 billion will come from the increased property valuations, while Rs40 billion will be raised through higher withholding taxes on these revised valuations and new rates.
Read more: Netflix Ordered to Pay Rs. 200 Million Tax By FBR
This decision was discussed during a Senate Standing Committee on Finance meeting, where Senator Farooq H Naek of the Pakistan Peoples’ Party supported the government’s proposal to impose a 10% sales tax on newspapers, citing declining readership.
From July, property valuations will rise from an average of 75% to 90% of market prices, said Mir Badsha Khan Wazir, FBR Member Operations. This adjustment will impact withholding tax calculations in specific cities. Previously, the government charged a 3% income tax on property transactions for tax filers, and 6% and 10.5% for non-filers on sales and purchases, respectively.
The committee meeting featured heated debates, with members criticizing the FBR’s approach to taxation and the Finance Minister’s economic policies.
The government had earlier withdrawn the compulsory CNIC condition for purchases over Rs50,000 to document the economy. However, critics argue that FBR’s tax policies disproportionately impact the salaried class and registered businesses while neglecting the undocumented retail sector.
