Proposals for Budget for year 2023-2024
Govt Intends to Impose Tax on Non-filers over purchase of Immovable Properties & Tax on Cash Withdrawals-FY 2023-2024
- FBR has prepared proposals to further increase the tax rate for non-filers on purchase of property. This move will incentivize property owners to file taxes leading to an overall larger tax net.
- FBR will also target those registered property agents who are involved in business transactions between the buyers and sellers of immovable properties to ensure payment of taxes.
- FBR is actively considering re-imposing a 0.6% tax on cash withdrawals, banking instruments, and banking transactions, with the potential implementation starting in July of this year.
Pakistan’s tax system suffers from a significant disparity: despite 7.6 million individuals being registered with the Federal Board of Revenue (FBR), only 3.6 million actually file tax returns, which amounts to less than 50% of the registered taxpayers. Pakistan has a population of 246 million, yet only 7.6 million pay taxes which means that 96% of the population does not pay taxes which reflects the inefficiency of the system.
More focus should be towards filling gaps in the system i,e to impose further taxes on dealers/agents/businessmen who are unregistered for tax purposes and manipulate transactions to avoid taxes. Keeping complete focus on withholding aspects of transactions would always be an easy escape for FBR to just fulfill their targets without long term solutions.